The President of Southern Power Engineering Group, Joanna Strzelec-Łobodzińska presented the potential and plans of the Group as well as central issues pertaining to operation of consolidated companies. She also added that the priorities of the group comprise preparations for going public. Minister Wojciech Jasiński noted this information as well as the Group’s Executive Board strategy  with satisfaction and declared that the Group’s stock exchange debut will be possible in 2008. „I believe that Southern Power Engineering Group will be among the first energy companies to go public”, he said. However, the Minister of the Treasury expressed a reservation that at least 51% of shares of the consolidated company should be owned by the state.

A major part of the discussion focused on negotiations with the workers. „Energy sector worker have no reasons to complain. All the obligations assumed by the Treasury were and are respected. We must also consider the issue of workers’ emerging expectations related to consolidation through the prism of the investment needs of the sector companies”, said the Minister. „The energy sector needs funds for investment and we have to make savings, since the expenses that need to be incurred are huge”, he added.

Wojciech Jasiński attempted to convince that the social consensus is of essence as far as sector transformation is concerned; nonetheless, interests of workers, companies and the entire Polish economy must be balanced. He added that any additional demands of the workers are unlikely to be satisfied and that the current social contracts ensure exceptionally high level of workers’ interests protection.

The Minister of Treasury announced that during trilateral meeting which is to be held the following week, the participants will raise the issue of increasing the initial capital ofSouthern Power Engineering Group by contribution of shares of the four consolidated entities.

“The consolidation is indispensable. If we do not merge the companies of fuel and energy sector, foreign entities will do it”, concluded the Minister of the Treasury.

***

Southern Power Engineering Group sprung into existence on 6 December 2006 as a result of consolidation of the energy sector, pursuant to government’s “Programme for Electrical Power Engineering Sector”. The company was established by the Minister of the Treasury -  representing the Treasury – and Enion, EnergiaPro and Stalowa Wola Power Plant.

The entity is seated in Katowice. The Board of the Company includes: the President Joanna Strzelec-Łobodzińska as well as vice-Presidents Remigiusz Nowakowski, Jerzy Hejnar and Filip Grzegorczyk.

The initial capital of the company will be increased by 85% of shares owned by the Southern Poland Power Company, Enion, EnergiaPro and Stalowa Wola Power Plant The remaining shares will be transferred to the workers of the consolidated companies. As a consequence, the second largest entity on the domestic energy market will emerge. At the beginning, Southern Power Engineering Group will act as an operational holding.

Its structures encompass mines with the annual production exceeding 5 million tons of coal and the energy producers  of installed electrical capacity of 5400 MW and the output exceeding 21 TWh. Two distribution companies of Southern Power Engineering Group may boast 4 million end-users and the sale of 28 TWh of energy. The scope of distribution entities activity comprises 53 000 square meters of the area and the length of their power lines exceeds 146 000 km. Four companies of the holding employ nearly 20 000 people.

The annual sale of the entire Group is forecast at 12 billion zlotys. In 2010, its profit is to reach 2 billion zlotys. According to Ministry of the Treasury schedule, Southern Power Engineering Group is to go public in 2008.

„At present, we are conducting intensive organizational woks as well as arrangements to increase the company’s initial capital.  Taking into consideration the plans of opening of the energy market on 1 July, we must increase the pace of our works. We want to launch preparations for going public as soon as possible. The structure of the four consolidated companies will need to be adjust to the common commercial and investment policy. Presumably, Stalowa Wola and PKE will merge first. We must also consider fast consolidation of the commercial activity. Southern Power Engineering Group will take over trading with the biggest clients”, said the President of the company, Joanna Strzelec-Łobodzińska.

„Southern Power Engineering Group will act along the entire value chain of the power engineering sector. Establishment of the  operational holding is targeted at the increase of the value of the entire Group through optimization of processes and costs. One of the key objectives for the Board will be balancing of interests of particular business lines (sub-sectors)”, added vice-President Filip Grzegorczyk.(s)