Polish Newag Starts $132 Million Share

Polish Newag Starts $132 Million Share :Newag SA, a Polish train producer, started a 414 million-zloty ($132 million) initial public offering, betting on investors’ demand for rail industry stocks as the government plans to quicken infrastructure investments.

Newag owners, including Zbigniew Jakubas, offered as many as 21.8 million shares, or a 48 percent stake, at a maximum price of 19 zloty a share, the Nowy Sacz, Poland-based company said in an IPO prospectus on its website today. Bookbuilding for institutional investors will end on Nov. 25 and the company plans to start trading on the Warsaw bourse by Dec. 4.

The company is the second in the domestic rail industry to sell shares to the public this year. State railway Polskie Koleje Panstwowe SA last month sold a 1.42 billion-zloty stake in PKP Cargo SA, the European Union’s second-largest rail freight company. PKP’s stock surged as much as 23 percent on its first day of trading after demand in its IPO was almost six times higher than offer.

“We hope Newag will benefit from an expected jump in passenger traffic in Poland and abroad as the EU plans to spend more and more on this form of transport,” Jakubas said at a news conference in Warsaw today. “To strengthen our position even more, we plan to introduce high-speed trains in 2018.”
Spending Spree

The government last week backed a plan to spend 24.9 billion zloty on modernizing rail infrastructure through 2015. Financing will mainly come from EU funds as well as from bond sales, loans and the state budget, the government said in a statement on Nov. 5.

Jakubas, whose assets also include stakes in coin producer Mennica Polska SA, industrial equipment manufacturer Polna SA and holding company Multico, earlier held talks to sell Newag to an industry investor.

“It’s not a secret that for more than a year we had held talks with a strategic investor to sell the whole company but we decided to sell a stake on the bourse,” Jakubas said. “It might happen Newag will be of interest to some big companies.”

Newag expects net income to increase to 79.3 million zloty next year from 37.9 million zloty in 2013. Last year, almost half of its sales came from orders from Polish railways. The company, which seeks to return 70 percent of profit to shareholders, plans to invest 100 million zloty in the next five years.

Jakubas will remain Newag’s biggest shareholder after the IPO, with a 39 percent stake, according to the prospectus.

Polish Newag Starts $132 Million Share

Source : mobile.businessweek.com

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