PGNiG hopes bondholders approve gas pipeline lease

Jan 13, 2005 01:00 AM

In what is a crucial step towards gas monopolist PGNiG's debut on the stock market, the company is pushing its bondholders to allow PGNiG to lease-out its gas transmission system by the end of March to a company subsidiary, PGNiG Przesyl, PGNiG's president Marek Kossowski told.
PGNiG, which expects initial public offering to take place in June 2005, plans to lease its gas transmission in March to stay on track with its parliament approved privatisation schedule.

As part of the schedule, the state treasury is to take over PGNiG Przesyl prior to the debut in order to keep its gas infrastructure state-owned. To carry out this operation PGNiG needs green light from its bondholders who have EUR 690 mm bonds.
"We assume that we will manage to complete a leasing agreement with PGNiG Przesyl by the end of March so that we will be able to meet the deadlines from the government-approved program and the IPO will take place in June as planned. According to the government program PGNiG's IPO can't take place until the transmission system isn't in the hands of the Treasury," Kossowski said.

The Treasury Ministry is also optimistic about accomplishment of the agreement with PGNiG Przesyl.
"I am deeply convinced that everything will go right and we will manage to sign the agreement with PGNiG Przesyl by the end of March," Deputy Treasury Minister Dariusz Witkowski said. PGNiG is convinced that bondholders won't oppose the agreement.
"There is no reason to claim that bondholders won't approve the transaction if it's well prepared in terms of the market clarity," PGNiG's vice-president Jerzy Staniewski said.

The Treasury intends to buy shares of PGNiG Przesyl directly but if it turns out that the treasury has problems with direct financing of the deal then it doesn't exclude participation of other company in the deal.
"The intention is to buy it directly but if it turns out that we can't then we will consider indirect purchase with participation of some company. It is possible that we willdecide about that in two-three weeks," Witkowski said.

PGNiG plans to submit its issue prospectus to Poland's Securities and Exchange Commission (KPWiG) in March.
PGNiG aims to raise PLN 1.5 bn by selling an estimated 10-15 % stake in a capital increase, though details have yet to be finalized. The company plans to spend the money on investments and financial restructuring. The Treasury will decide on selling its existing PGNiG shares within six months of the IPO. It currently plans to retain a 51 % stake in the company.

Source: Interfax-Europe
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