EBRD supports PKP Cargo privatisation

By Axel  Reiserer

The EBRD is supporting the partial privatisation of PKP Cargo S.A., with the acquisition of a 5.27 per cent equity stake in the Polish rail freight services provider.

The Bank’s equity investment has been made through the subscription of shares during an initial public offering (IPO) made by the company’s sole shareholder, PKP S.A., the Polish national railways, which itself is owned by the Polish government.

Through the IPO, 50 per cent of shares, minus one share, in PKP Cargo have been privatised, while the balance remains owned by PKP S.A. The shares have been listed on the Warsaw Stock Exchange for the first time today.

The transaction is the first privatisation in the rail sector in Central Europe and the EU by means of an IPO.

By becoming a shareholder in PKP Cargo the EBRD gained the right to nominate one of the independent members of the supervisory board. The charter of the company has been amended accordingly, and it will be subject to stock market regulations in reporting and disclosure.

Sue Barrett, EBRD Director, Transport said: “The EBRD is proud to support the privatisation of PKP Cargo as an important step forward in the development of the company and the overall Polish railway sector. The IPO will contribute to substantial improvements in corporate governance, transparency and management. Finally, the successful part privatisation is also a strong signal of encouragement for capital markets in Poland.”

PKP S.A. is the state-owned Polish railway operator. The company is divided into several units, separating transport services operations and rail network management. Within the PKP Group, PKP Cargo is responsible for freight train operations. It is currently the largest railway cargo carrier in Poland and the second-largest in the EU.

According to PKP S.A.’s accounts, in 2012 the company transported 116.7 million tonnes of goods. Over half of the total transport movements were internal, and the remainder were export and import transport movements to and from the borders of Poland, as well as transit services.