Monday, June 13, 2011

Small miracle

Warsaw decided to throw out a joint venture of state-owned utility PGE and gas monopolist PGNiG from the ongoing privatisation of Warsaw's municipal heating distributor SPEC.

Until now it seemed clear the transaction would end up as yet another "privatisation," that is, an example where a state-owned (in this case municipally owned) company becomes indirectly state-owned because it was bought by a state-controlled entity. It's sort of like putting money in a different pocket.

According to media reports, the potential buyers now include French utility Dalkia, private equity group Penta and . . . Jan Kulczyk (no word on the Libyans yet).

In my book, the odds are this sale will wind up as did the ill-fated Enea transaction: as a disaster. After all there are no more state-owned companies in the race anymore.

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