Poland's largest power group PGE SA, decided to merge with a subsidiary resulting in more leveled corporate structure in order to overcome delays in paying out dividends from profits at its units.
Chief Financial Officer Wojciech Topolnicki said in a telephonic interview today, "PGE will eliminate the delay after it registers a merger with its PGE Electra SA subsidiary in August. The faster payments will be possible beginning with the 2010 profit. The company generates about 70 percent of its profits outside of the parent company, the entity that pays the dividend. That ratio will change to 50 percent after the transaction is completed".
40-50% of profit is to be paid by PGE's long-term dividend policy as the company said in a share prospectus last year, whereas in short-term the company will amend the dividend levels to current investment needs and according to the conditions of the credit market.
Topolnicki also added, "The merger will reduce the number of layers in PGE's structure to two from five, and will improve its ability to get external financing by increasing the size of the parent company".
According to CFO, preliminary 2009 earnings will be published soon. The net income on sales for the company was 2.52 billion zloty. The benchmark WIG20 index elevated 1.8%.