WARSAW, July 24 (Reuters) - Polish Prime Minister Donald Tusk on Friday opposed the treasury ministry's plans to sell its stake in copper miner KGHM , pointing to a rift inside the government over plans to aid the ailing state budget.
Tusk echoed Thursday comments by his deputy Grzegorz Schetyna, saying he would rebuff the Treasury's surprise proposal to sell between 10 and 41 percent in KGHM as part of a 36.7 billion zloty ($12.3 billion) privatisation plan.
'Speedy privatisation does not seem beneficial from Poland's budget point of view,' Tusk told a news conference. 'That's why I will recommend exiting KGHM from the fast privatisation plans.'
Warsaw aims to raise privatisation gains to avoid tax hikes in 2010, when Tusk is expected to run against conservative President Lech Kaczynski in presidential polls. The government is to decide on privatisation plans at its sitting next week.
'It seems as though there will be no further privatisation of KGHM,' Robert Maj, analyst at KBC securities in Warsaw, said. 'The political risk would be too high given that there are presidential elections in 2010 and parliamentary ones in 2011.'
A sharp economic slowdown has already forced Warsaw to amend its 2009 budget, widening the budget gap by half to 27 billion zlotys.
Poland's centre-right government vowed not to sell any of its nearly 42-percent stake in KGHM, Europe's No.2 copper producer, when it took office nearly two years ago. Poland floated the miner in 1997, maintaining a controlling stake.
Tusk added on Friday that further privatisation of KGHM was not favourable at the moment, as the company could bring to the state coffers just as much in dividends in the next five to six years as it would from the stake sale.
The treasury's sale plan is also opposed by the miner's powerful unions, which fear deep job cuts and have threatened to go on strike if the plan goes ahead.
Following a stern 'no' from Deputy Prime Minister Schetyna, the ministry backtracked by saying the plan was only a proposal, leaving it up to the government to decide.
Tusk threatened he would sack Treasury Minister Aleksander Grad if a different planned sale -- of Polish Gdynia and Szczecin shipyards -- did not materialise by the end of August.
The treasury ministry's spokesman said that it was possible to raise the planned 36.7 billion zlotys from sell-offs without privatising KGHM. He also said the decision was not with the government.
'The treasury ministry was asked to prepare privatisation proposals and this is what we did - we presented proposals. It is the government that will be making the decision,' said Maciej Wewior.
Shares in KGHM, valued at 16.2 billion zlotys, closed the day with a 1.9-percent gain, compared with a 1.6-percent rise for Warsaw's main index WIG20 . The stock is Warsaw's best performer this year, nearly tripling in price.
(Writing by Adrian Krajewski; Editing by David Cowell; Editing by Rupert Winchester) ($1=2.975 Zloty) Keywords: KGHM/ (adrian.krajewski@thomsonreuters.com; +48 22 653 9709; Reuters Messaging: adrian.krajewski.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Tusk echoed Thursday comments by his deputy Grzegorz Schetyna, saying he would rebuff the Treasury's surprise proposal to sell between 10 and 41 percent in KGHM as part of a 36.7 billion zloty ($12.3 billion) privatisation plan.
'Speedy privatisation does not seem beneficial from Poland's budget point of view,' Tusk told a news conference. 'That's why I will recommend exiting KGHM from the fast privatisation plans.'
Warsaw aims to raise privatisation gains to avoid tax hikes in 2010, when Tusk is expected to run against conservative President Lech Kaczynski in presidential polls. The government is to decide on privatisation plans at its sitting next week.
'It seems as though there will be no further privatisation of KGHM,' Robert Maj, analyst at KBC securities in Warsaw, said. 'The political risk would be too high given that there are presidential elections in 2010 and parliamentary ones in 2011.'
A sharp economic slowdown has already forced Warsaw to amend its 2009 budget, widening the budget gap by half to 27 billion zlotys.
Poland's centre-right government vowed not to sell any of its nearly 42-percent stake in KGHM, Europe's No.2 copper producer, when it took office nearly two years ago. Poland floated the miner in 1997, maintaining a controlling stake.
Tusk added on Friday that further privatisation of KGHM was not favourable at the moment, as the company could bring to the state coffers just as much in dividends in the next five to six years as it would from the stake sale.
The treasury's sale plan is also opposed by the miner's powerful unions, which fear deep job cuts and have threatened to go on strike if the plan goes ahead.
Following a stern 'no' from Deputy Prime Minister Schetyna, the ministry backtracked by saying the plan was only a proposal, leaving it up to the government to decide.
Tusk threatened he would sack Treasury Minister Aleksander Grad if a different planned sale -- of Polish Gdynia and Szczecin shipyards -- did not materialise by the end of August.
The treasury ministry's spokesman said that it was possible to raise the planned 36.7 billion zlotys from sell-offs without privatising KGHM. He also said the decision was not with the government.
'The treasury ministry was asked to prepare privatisation proposals and this is what we did - we presented proposals. It is the government that will be making the decision,' said Maciej Wewior.
Shares in KGHM, valued at 16.2 billion zlotys, closed the day with a 1.9-percent gain, compared with a 1.6-percent rise for Warsaw's main index WIG20 . The stock is Warsaw's best performer this year, nearly tripling in price.
(Writing by Adrian Krajewski; Editing by David Cowell; Editing by Rupert Winchester) ($1=2.975 Zloty) Keywords: KGHM/ (adrian.krajewski@thomsonreuters.com; +48 22 653 9709; Reuters Messaging: adrian.krajewski.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.