The government now owns 35 percent of Poland's top insurer WBJ/Archives

Poland’s Treasury sold a 10 percent stake in the country’s largest insurer, PZU, for zł.3.17 billion last week. The government sold 8.6 million shares at zł.367 per share, according to a statement on the Treasury Ministry’s website.

The sale was oversubscribed and half of the shares went to foreign investors and half to domestic buyers, the Treasury said. The 10 percent stake was valued by a number of analysts at zł.3.3 billion prior to the sale.

Credit Suisse, Goldman Sachs, ING, JPMorgan Chase and UniCredit were involved in an accelerated bookbuilding process, which took place throughout last week, Rzeczpospolita reported.

In March, Treasury Minister Aleksander Grad told reporters that Poland would not sell shares in the company this year. He said that in the long term the Treasury wanted to keep hold of about 25 percent of PZU.

Dariusz Górski, an analyst at Wood & Company, said the Treasury’s decision to sell had caught the market flat-footed.

“It was definitely a surprise move by the Treasury,” he said. “They would have had to sit on the stock for quite a while for [PZU] to become profitable again. They must expect it would fall more in the future, so they’re cutting their losses,” he added.

The Treasury owned 45 percent in the company prior to the sale, meaning its holding will now be cut to 35 percent. Shareholders recently passed an amendment to the company’s constitution that allows only the Treasury to hold more than 10 percent of all shares in the company.

PZU debuted on the Warsaw Stock Exchange on May 12, 2010, but only after the conclusion of a protracted ownership dispute between the Polish government and Dutch insurer Eureko.

Prior to the latest sale of PZU stock, Poland had raised about a fifth of its privatization goal of zł.15 billion this year. It has had to endure some disappointments, such as the initial public offering of Bank Gospodarki Żywnościowej (BGŻ), which earned the Treasury only 22 percent of the zł.1.44 billion it had hoped to raise.

Thomas Kolasa