Poland Wants to Sell Azoty Tarnow Stake to EBRD

Poland wants to sell at least 5% of chemicals maker Azoty Tarnow to the European Bank for Reconstruction and Development, sources close to the discussions said, in a move to block Russian rival Acron from increasing its stake.

Two sources said the EBRD was to discuss the issue on Tuesday.

Fertilizer group Acron said on Saturday it had raised its holding in Tarnow to 12.9% after attempting unsuccessfully to take it over last year, and proposed a strategic partnership with the Polish firm in raw materials like ammonia and phosphates.

The Polish government thwarted the 2012 takeover by merging Tarnow with its state-controlled rival, Pulawy, and now holds 45% of the group.

It plans to sell a 12% stake by April 24 in order to cut its share below a third. Otherwise it would be legally bound to increase its stake to 66%, which would be difficult considering Poland's strained budget.

Poland has been reluctant to allow its historical adversary Russia to gain a foothold in certain sectors in recent years, most recently blocking Acron's takeover attempt and rebuffing Russian bids for troubled builder Polimex.

Shares in Tarnow have gained 70% since July 12 last year, the day before the merger with Pulawy was announced. On Tuesday they were trading at 61.55 zlotys, giving the company a market capitalisation of 6.16 billion zlotys ($2 billion).

An EBRD spokesman declined to comment, and no comment was available from Poland's Treasury Ministry, which oversees state assets.