Dear Readers,
It's not all bad news even though it may look like that at present. Eastern Europe continues to offer opportunities for growth sometimes better than in Western Europe. The insurance and pharmaceutical industries in Poland are examples about which you can read more in this Newsletter. The prospects for the engineering and medical technology sectors also look good. Both sectors are included in the sale of state enterprises, which is scheduled to take place in by 2011. Some of offered state enterprises could turn out to be attractive investments. In February 2009, changes were introduced into the law on commercialization and privatization to help the privatization process by making it more transparent, by simplifying the process and by shortening its duration. Don't be put off by the prevailing gloom. A closer look may be rewarding. We would be glad to assist you.
Your Christoph Spiering
| Opportunities to Get Into Growth Industries The Polish Ministry of State Treasury intends to privatise approx. 800 state owned companies by 2011. Initially this number was lower but recent revisions to the privatization plan (February 2009) increased this number which indicates the government's determination to unblock and speed up the privatization in Poland. Financial and strategic investors are offered the opportunity to enter or expand in the Polish market. The first round includes the sale of state banks and savings banks, insurance companies, pharmaceutical, food, air transport and raw materials enterprises. Later, energy, chemical, agricultural, wood, paper, textiles, furniture and electronics companies will follow. Also recently (February 2009) the government presented a list of 34 selected companies as privatization targets. High Growth Rates All sectors in Poland have considerable ground to make compared to Western Europe so that - in spite of the financial crisis which is also felt in Poland - high growth rates can be expected in the long-term. In the insurance industry, for example, life insurance premium income grew in recent years by double figures (17 to 19%) year on year. Even still, the expenditure per citizen on insurance in Poland is less than one sixth of that in Germany. The room for expansion is obvious. Similar growth prospects apply to the pharmaceutical industry, which many professionals regard as a relatively secure investment compared to other industries. | Auctions Instead of Stock Exchange Flotations The plans of the Ministry of Treasury to conduct many of the sales through the Warsaw stock exchange are likely to have been frustrated to a great extent by current developments on the capital markets. Classical sales by tender and auctions are the likely result. Close and continuous observation of the market is advisable. We would gladly do this for you! Purchase Risk Manageable The legal risks involved for investors in acquisitions and possible tenders and auctions are manageable. It is nevertheless indispensable that the bidder is legally advised locally from the outset since privatisation transactions differ significantly from traditional transactions. The state rarely provides guarantees or indemnities, thereby increasing the importance of due diligence exercises and limiting the bidder's room for negotiation. Considerable investment obligations may also be demanded of the purchasers. These must be considered from the beginning so that the best possible strategic and tactical positions are adopted in the negotiations from the start. The long experience of our local colleagues is available to you both in privatization negotiations with the state as well as the negotiations of social plans with trade unions, which are usually held in parallel. We also have experience in dealing with Polish authorities, which is very important if one wants to get things done. | For Further information please contact:
NÖRR STIEFENHOFER LUTZ Dr. Christoph Spiering, LL.M. Rechtsanwalt Charlottenstraße 57 10117 Berlin Tel +49-(0)30-20 94-20 36
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©Nörr Stiefenhofer Lutz 2/2009 |
