Polish state energy firm Orlen preparing to sell media group purchased under former government

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Poland’s state assets minister has confirmed that state energy firm Orlen is preparing to sell off Polska Press, the media group that it controversially purchased under the former Law and Justice (PiS) government.

Wojciech Balczun says that Orlen is first undertaking a restructuring of Polska Press, which owns hundreds of local newspapers and websites, to make it more independent and profitable – and therefore more attractive to potential buyers.

Orlen’s move in 2020 to buy Polska Press from its previous German owner, Verlagsgruppe Passau, was widely seen as an attempt by its CEO at the time, Daniel Obajtek, to help provide more friendly media coverage for the national-conservative PiS government.

Before leading Orlen, Obajtek had been a PiS politician and, after his firing last year by the current government, he returned to the party and became a member of the European Parliament.

After Orlen formally took control of Polska Press in 2021, it fired many senior editors and replaced them with figures more sympathetic towards PiS. The media group’s titles subsequently provided coverage that often favoured the ruling party.

Reporters Without Borders cited the takeover of Polska Press as a factor in Poland falling to a record low position of 66th in the NGO’s World Press Freedom Index in 2022. Norway’s sovereign wealth fund, which holds a stake in Orlen, also expressed concern over the move.

When a new, more liberal coalition government, led by Prime Minister Donald Tusk, took power from PiS in December 2023, it claimed that it would “depoliticise” media outlets that had fallen under PiS influence.

However, over 20 months later, Orlen still retains ownership of Polska Press, despite reports last year that a number of other media groups were interested in purchasing it.

In January this year, Orlen’s current CEO, Ireneusz Fąfara, called the decision to buy Polska Press a “bad and unnecessary investment” and announced that the process to sell off the media group would begin “around June or July”. However, that deadline has passed without any further developments.      

On Tuesday this week, Balczun, the state assets minister, confirmed, in response to a parliamentary question, that Orlen still intends to sell off Polska Press.

But the priority for now is a “systematic improvement of quality and competitiveness, which will ultimately allow for a profitable sale of the company”, added Balczun, quoted by the Polish Press Agency (PAP).

In late 2023, industry news website Wirtualne Media noted that Polska Press had been posting annual losses of over 50 million zloty (€11.8 million) and that it was likely worth less than half of the 210 million zloty that Orlen paid for it.

“The investment in Polska Press and the subsequent management of the publishing house were not effective or financially beneficial,” said Balczun on Tuesday. “That is why initiatives are currently being undertaken that will allow the company to regain profitability and market position.”

“The sale of the publishing house will be carried out after the completion of this process,” he added, quoted by the Rzeczpospolita daily.

The minister noted that Orlen, which is now under leadership appointed by the current government, has already improved Polska Press’s financial results while putting in place measures to “fully guarantee journalistic independence for employees”.

As a result, said the minister, Orlen has now been removed from the Norwegian sovereign wealth fund’s watch list and Polska Press is “gradually regaining the trust of readers and advertisers”. It also posted a net profit in the first quarter of this year.

Meanwhile, Orlen has investigated irregularities at Polska Press under its former management. That resulted in a request being submitted in April to prosecutors to investigate whether the group’s management board committed a crime by refusing to publish opposition election adverts in 2023.

Last week, Orlen itself announced, in response to questions from financial news website Money.pl, that it is “undergoing a restructuring process aimed at increasing its attractiveness to potential investors”.

“The sale of [Polska Press] will be carried out after the completion of this process,” said Orlen. “The detailed schedule and procedure of the planned sale constitute a trade secret and cannot be made public.”

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Slawomir Kaminski / Agencja Wyborcza.pl

Daniel Tilles

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.