Transcript Minister Wiesław Kaczmarek

Ministry of the Treasury
Special rights
in privatised companies in Poland
Anita Ryng
Director of the Department of European Integration
and Foreign Relations
Luxembourg, 28 June 2005
15 Years of Polish Privatisation
1990
• approx. 8,500 state
enterprises
2005
• approx. 1, 800 Treasury
corporations and state
enterprises
•366 operating state-owned enterprises
(in 113 privatisation advanced)
•1,519 Treasury corporations
0%-50%
967
50%-75%
61
75%-99%
38
100%
453
Transformation of Ownership Structure
in the Years 1990 - 2005
COMPLETED AND
ADVANCED
PRIVATISATION
• Banking
• Trade and services
• Telecommunication
• Household goods industry
• Automotive industry
• Building industry
• Electrical engineering
• Nonferrous metallurgy
• Cement industry
• Wood and furniture industry
• Food processing
• Breweries
• Tobacco industry
ADVANCED
AND CONTINUED
PRIVATISATION
• Insurance
• Steel sector
• Shipbuilding industry
• Sugar industry
• Spirits industry
• Transport (LOT, PKS)
• Oil sector
• Pharmaceutical sector
• Mining (minerals)
• Light industry
• Media and publishing
CONTINUED
RESTRUCTURING, INITIATED
AND PLANNED
PRIVATISATION
• Hard coal mining
• Power sector (electricity)
• Gas sector (PGNiG - Polish
•
•
•
•
•
•
Oil and Gas Company)
PKP (Polish railways)
Defence sector
Heavy chemicals sector
Shipping
Health resorts sector
Research and Development
Units
Why golden share in Poland?
At the beginning of the transformation:
•Large scale of privatisation
•Inefficient civil courts
Mechanism of control:
•Stakeholders‘ rights (social contracts)
•Investment commitments of the investors
Public perception of the privatisation
process
Investors’ social and investment commitments
in privatised companies
Company; investor
Zespół Elektrowni
PĄTNÓWADAMÓW-KONIN
S.A. power group;
Elektrim
Polfa Poznań
pharmaceutical
company;
GlaxoSmithKline
Pharmaceuticals
Bank Zachodni
WBK S.A. we
Wrocławiu bank;
AIB European
Investments Ltd
Zakłady Przemysłu
Tytoniowego
Kraków tobacco
company; Phillip
Morris
Employment
guarantees
10 years
48 months
8 months
24 months
Social commitments
wage guarantees,
bonus and social
security
contributions,
financial incentives
Investment commitments
PLN 3,500 mln (1999-2009)
PLN 1,500 mln (1999-2004)
USD 100 mln till Jan. 28, 2003 –
increase of capital –
USD 60 mln till Jan. 28, 1999
social benefits to be PLN 850 mln (capital increase –
maintained for 18
PLN 250 mln; further
months, continuous investment - PLN 600 mln)
training, development
of job-related skills
USD 145 mln within 3 years
Public Opinion: positive or negative impact of
privatisation on the Polish economy (in %)
positive
negative
ee
Examples of Polish golden shares
• Right to nominate part of the Supervisory Board
(sometimes also the chairperson of the SB)
• Consent of the Treasury to major corporate decisions
(mergers, changes in the statutes,
disposal of assets and rights to appoint members
of the board)
Number of golden shares
Before accession: approx. 90 cases cancelled
1.05.04: golden shares in 73 companies
•24 of them removed (by 30.03.05)
•17 time limited instruments - will expire
in the next two - tree years
•remaining cases: sale of shares or changes of the Articles
of Association in 2005
•a few - modified according to the Law on special rights of
the Treasury and their Exercising in Companies of Special
Importance for public order and public security – (final
stage in the Parliament)
Problems
•No clear definition: what is a special power? What is a restriction?
•if we sell:
lack of investors’ wish to buy remaining Treasury stakes
(and "golden share")
•if we would like to change the Articles of Association:
lack of investors' co-operation
•no other investor interested in buying shares (minority stakes)
without the chance of exercising control
Investors obviously do not feel harmed
by the Treasury's special rights,
otherwise they would co-operate
New regulation
Very limited and precisely defined number of companies
exerting substantial influence on public order or public security
The Minister may object to:
•dissolution of the company,
•transfer of the registered seat of the company abroad,
•change in the object of the company’s enterprise,
•transfer or lease of the company’s enterprise
BUT...
New regulation
-exclusively consequent review (ex post intervention)
-a very short period of time within which the veto right may
be exercised by the minister
-judicial review of “veto” decisions as the minister’s decisions
can be appealed against in courts
Justification:
introduction of a transparent instrument
intervention in certain decisions but
predictable and transparent for potential investors;