EBRD acquires stake in Polish Grupa Azoty

By Axel  Reiserer

The EBRD has acquired a 5.75 per cent-stake in Grupa Azoty, Poland’s biggest producer of fertilisers and chemicals, for PLN 296.4 million (equivalent of €72.1 million). The investment follows the Polish government’s decision to continue the privatisation of the company and reduce its own stake. The transaction builds on the Bank’s track record in Manufacturing and Services sectors in Poland, especially in the chemicals.

The EBRD investment was made alongside other institutional investors by way of a block trade, following an accelerated book-building process carried out by the state treasury on the Warsaw Stock Exchange. As a result of the process the state’s ownership and number of voting rights in the company will fall to 33 per cent.

Following a comprehensive consolidation process of the Polish chemical industry, Grupa Azoty emerged not only as market leader in Poland, but also as a leading producer of fertilisers and chemicals in Europe. As a final step in this process the European Commission approved the merger with Zakłady Azotowe Puławy in January 2013.

The company has been listed on the Warsaw Stock Exchange since mid-2008 and currently has a market capitalisation of PLN 5.5 billion/€1.4 billion. Grupa Azoty reported revenue of PLN 7.1 billion, EBIT of PLN 372 million, net profit of PLN 315 million and earnings per share of PLN 4.59 in 2012. At the end of last year the company employed more than 8.500 people. Following the merger with Zakłady Azotowe Puławy pro-forma sales are expected to exceed PLN 10 billion.

Lucyna Stanczak, EBRD Director for Poland, said: “Our involvement aims at actively promoting and supporting the privatisation process of the company. Poland has taken decisive action to consolidate the chemical sector and the next step now must be to make the players fit to compete on the global market. Successful implementation of the integration and restructuring process, the transfer of know-how and increased private ownership will prove invaluable for this process. EBRD will use its stake to pay special attention to the restructuring of the company and the introduction of best corporate governance standards.”

Since the beginning of its operations in Poland, the EBRD has invested over €6 billion in over 300 projects in the country. The Bank provides support to enterprise restructuring, modernisation and privatisation, by sharing risk with local or foreign investors, particularly in more challenging sectors.