How Will Injection of Politics into Tauron Affect Shareholders?

The verdict is still undecided, but the initial view is not encouraging. The Treasury Ministry is using its leverage as the major shareholder to put in new directors who are more friendly toward the idea of bailing out a bankrupt state-owned coal mine. The initial Tauron proposal based on a real business case was dismissed by the unions and the government.

The Polish Government wants to use Tauron's economic muscle to bail out a mining company that is not economical to operate.

Why would private investors have any confidence that such companies manipulated by the government are actually operating in a manner designed to benefit their other shareholders?

See source, August 13, 2015.

Note: August 26, 2015: All the state-owned electricity companies have been hit hard by falling stock prices. The Government has also pushed the other company boards to use their company resources to bail out coal (on very unrealistic terms due to union pressure). If successful, the Government will only succeed in also destroying the electricity companies as well as the mines.


Popular posts from this blog

Hitting Reality: Polish Energy Policy Meets the Facts

New Rules on Polish Auctions for Biogas

Renewable Energy in Poland Slowed Down by Auction Mechanism