Major Polish oil refiner and petrol retailer PKN ORLEN signed an agreement with the State Treasury regarding the planned takeover of capital control over the Polish Distribution System Operator, ENERGA Group. After receiving the European Commission’s approval to go ahead with the transaction at the end of March, the agreement is another important step for PKN ORLEN to complete the acquisition, which is expected to contribute to the further diversification of the company’s business and strengthen its position on the competitive European market.
PKN ORLEN affirmed its intentions to continue the strategic investments of the Gdańsk-based energy group, to maintain the employment policy ensuring the proper functioning of its companies and to implement the transaction in full support of the national energy agenda.
Daniel Obajtek, President of the Management Board of PKN ORLEN stated that the establishment of a strong group with diversified areas of activity, resistant to risks and market fluctuations, will significantly strengthen and boost the Polish economy, especially under the current extraordinary and challenging circumstances.
The agreement makes specific provisions on the continuation of ENERGA’s strategic investments. However, it also gives the opportunity to review the conditions of their continuation, in particular the construction of the controversial Ostrołęka C Power Plant.
The construction of the coal-fired power plant gained vast publicity in Poland and came under a heavy wave of criticism questioning the project’s profitability and impact on the country’s future energy pathway. Ostrołęka is said to be the last new-built coal power plant in Poland, with electric power output expected of up to 1,000 megawatts (MW). PKN ORLEN hinted already that coal is not their preferred technology when it comes to choosing a fuel for the plant and that the group is analysing various options for the project so that it can fit into the ORLEN’s strategy.
According to the agreement, the takeover won’t affect the obligations of the companies regarding, among others, maintaining the total installed capacity from renewable energy sources, generating and ensuring continuity of heat as well as proper operation and reliability of the ENERGA distribution network, in accordance with the development plans approved by the President of the Energy Regulatory Office.
ENERGA is one of the four largest domestic energy companies and one of the three largest electricity suppliers in Poland. The Polish State Treasury holds 52 per cent of share capital in the company. The agreement will enter into force on the date ENERGA Group shares belonging to the Treasury will be transferred to PKN ORLEN.
Early last week, PKN ORLEN increased the price of one ENERGA share to 8.35 złoty (1.85 euros), which was originally set to 7 złoty (1.55 euros). The company announcement specified that the increased price will be paid for all shares of the ENERGA Group covered by the subscription for the entire duration of the call, from 31 January to 22 April 2020.