New owner vows to make big PKP Energetyka investments

In July Polish state-owned railways PKP gave the private equity fund CVC exclusive negotiation rights in the privatisation of its subsidiary PKP Energetyka.

Luxemburg-based CVC reportedly offered the highest price, of PLN 1.5 billion (USD 395 million). Other offers were submitted by listed Polish energy groups Energa, Tauron, Enea and PGE, each reportedly willing to pay PLN 1.3 billion.

The company’s energy network supplies the Polish railway network, Przemysław Obłój of CVC Capital Partners told the Polish Press Agency (PAP).

CVC promised that within five years it will invest approx. PLN 2 billion in the company. The fund signed an agreement with trade unions and both sides pledged to respect a collective agreement and employment guarantees until 2019.

PKP Energetyka is a nationwide power distributor to the Polish railway network and other customers. It provides maintenance and emergency response services to the railway network, also running fuel stations for diesel locomotives and is active in electricity and gas reselling.

"New trains, both passenger and freight, require a much more robust network. Therefore, we need to improve the network - colloquially speaking – to stop traffic jams when trains pass," Obłój said.

"In a few years we will think about whether we can list the company on the stock exchange. We also talk with potential investors who would take a minority stake," Obłój added.

"We want to develop both as a distribution and a service company. Distribution will see investment of PLN 500 million a year on expansion and replacement of substations that need to be spaced along the rail network. (jh/rk)