Courtesy of KGHM

Shareholders in Polish state-controlled copper giant KGHM voted on Thursday against the buyback plan proposed by the company’s management board in mid-November. Analysts say the state voted as it did to ensure that the entity remains a cash cow for Warsaw, ft.com reported.

The government needs revenue from the miner's large dividends – expected at zł.3 billion this year – and from a proposed metals extraction tax to help it lower the budget deficit and public debt.

The company's management board had earlier proposed that it would buy up 10 percent of the company's shares at zł.190 apiece, saying the firm was undervalued.

“We had rather expected the buyback to be approved, but the state is concerned that the company remains well capitalized,” Bram Buring, an analyst at Wood & Co, told ft.com.

Almost immediately after the plan was voted down, KGHM’s stock price slumped by some 8 percent, but almost managed to return to its opening level by the end of the session.

The extraordinary general meeting of KGHM also dismissed five persons from the company’s supervisory board, Parkiet reported.

Poland A.M.