* 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 ZE PAK at 1.72 billion zlotys ($544 million) in a prospectus issued on Wednesday, close to the lower end of brokers' estimates as optimism about the stock is scaled back.
In the country's biggest initial public offering of the year, the state will list its 50 percent stake in the firm in a sale it hopes will make a hefty contribution to the 10 billion zlotys in state asset sales targetted for this year.
Other local utilities have under-performed the market in the past few weeks because of concerns about the slowing economy. Fund managers also have concerns about the age of ZE PAK's power plants and the amount of CO2 they emit.
The prospectus, published on ZE PAK's website, said 75-85 percent of the shares sold will be offered to financial institutions, with the rest to retail investors. The shares are to debut on the stock market on Nov. 30 or near that date.
Brokers had expected the utility to be worth between 1.5 billion and 3.7 billion zlotys.
ZE PAK's power stations account for about 7 percent of total Polish generating capacity. It produces most of its power from highly-polluting lignite, the second most important source of energy in Poland after hard coal.
It also controls lignite mines, bought from the state in July this year, which supply the group's power stations, making it fully independent of external sources of supply.
The company's net profit in the first half of 2012 dropped to 214 million zlotys from 249 million zlotys a year earlier, mainly due to lower power sales as local utilities struggled with a decline in power consumption in the second quarter.
The group plans to invest 2.8 bln zlotys in the years 2013-2017 on modernisation of its power stations and the development of new generation that will replace some of its ageing units.
Up to half of the total will be financed from the group's own financial resources, while the rest will come from external sources such as loans or bonds, ZE PAK said.
The group said its goal is to maintain generation capacity at no less than 2.1 gigawatts over the next seven years. During that period it will have to shut down 943 megawatts of capacity because it is too old.
The utility plans to build two gas- and steam-fired units with a total capacity of 520 megawatts and build wind farms with a total capacity of 230 megawatts.
ZE PAK expects to pay a dividend of up to 30 percent of its standalone net profit by 2016 and in the long-term switch to paying 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/