⁍ CVC bought PKP Energetyka from the state-owned railway firm in 2015.

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⁍ The ruling Law and Justice party tried to annul the transaction in court.

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⁍ It said selling assets such as PKP Energetyka contravened Poland’s national security interests.

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– Two years ago, private equity firm CVC Capital Partners bought Poland’s PKP Energetyka for $507 million, including debt. Now, the firm is preparing to sell the utility, one of the country’s biggest energy groups and an electricity supplier to the national railway, for more than $2 billion, sources tell Reuters. CVC bought PKP Energetyka from the state-owned railway company in 2015, but the ruling Law and Justice party (PiS) tried to block the deal, saying selling assets like PKP Energetyka contravened Poland’s national security interests. PiS also has tightened regulation of the energy market, and PKP Energetyka has suffered from a cap on power prices introduced in 2019 to protect consumers from the impact of rising carbon emission costs. Since 2015, CVC has been approaching PiS representatives and allies to ease the conflict and convince the government it is raising the company’s value, people close to the matter have said. Local media have also reported that PiS actions against CVC may undermine good relations with Washington. Infrastructure investors such as KKR, Macquarie, and First State showed interest in PKP Energetyka in 2015, but some of them may shun the auction in the face of PiS’ expected reluctance to sell the asset to a foreign investor. One person familiar with the matter said bidders were expected to offer a valuation of about 7.5-8 times PKP Energetyka’s core earnings, or 1.1-1.2 billion euros, including debt. Another said PKP Energetyka’s enterprise value could reach 1.8 billion euros, or up to 12 times core earnings.