* Valuation at lower end of brokers' estimates
* Polish stake offering its 50 pct stake in utility
* 75-85 pct of offer for institutions, rest for retail
(Adds details from prospectus)
WARSAW, Oct 10 (Reuters) - Poland valued local utility ZEPAK at 1.72 billion zlotys ($544 million) in a prospectus issuedon Wednesday, close to the lower end of brokers' estimates asoptimism about the stock is scaled back.
In the country's biggest initial public offering of theyear, the state will list its 50 percent stake in the firm in asale it hopes will make a hefty contribution to the 10 billionzlotys in state asset sales targetted for this year.
Other local utilities have under-performed the market in thepast few weeks because of concerns about the slowing economy.Fund managers also have concerns about the age of ZE PAK's powerplants and the amount of CO2 they emit.
The prospectus, published on ZE PAK's website, said 75-85percent of the shares sold will be offered to financialinstitutions, with the rest to retail investors. The shares areto debut on the stock market on Nov. 30 or near that date.
Brokers had expected the utility to be worth between 1.5billion and 3.7 billion zlotys.
ZE PAK's power stations account for about 7 percent of totalPolish generating capacity. It produces most of its power fromhighly-polluting lignite, the second most important source ofenergy in Poland after hard coal.
It also controls lignite mines, bought from the state inJuly this year, which supply the group's power stations, makingit fully independent of external sources of supply.
The company's net profit in the first half of 2012 droppedto 214 million zlotys from 249 million zlotys a year earlier,mainly due to lower power sales as local utilities struggledwith a decline in power consumption in the second quarter.
The group plans to invest 2.8 bln zlotys in the years2013-2017 on modernisation of its power stations and thedevelopment of new generation that will replace some of itsageing units.
Up to half of the total will be financed from the group'sown financial resources, while the rest will come from externalsources such as loans or bonds, ZE PAK said.
The group said its goal is to maintain generation capacityat no less than 2.1 gigawatts over the next seven years. Duringthat period it will have to shut down 943 megawatts of capacitybecause it is too old.
The utility plans to build two gas- and steam-fired unitswith a total capacity of 520 megawatts and build wind farms witha total capacity of 230 megawatts.
ZE PAK expects to pay a dividend of up to 30 percent of itsstandalone net profit by 2016 and in the long-term switch topaying up to 50 percent of its consolidated net profit.($1 = 3.1639 Polish zlotys)
(Reporting by Maciej Onoszko; Editing by Toby Chopra)
Keywords: POLAND IPO ZEPAK/