Today management of Netia is likely to recommend measures of increasing the companyís capital. If tomorrow shareholders do not vote for a new share issue it will put the company only one step away from the bailiffs.
The new issue will be aimed at being exchanged in return for debt thus making creditors the strategic investor in the company.
The Swedish Telia which currently owns nearly half the stock will see its stake reduced to 2.3 percent if this move succeeds. Although heavily indebted itself, it may make moves to increase this holding at a later date. It is possible that the Swedes could buy more stock from bond holders or Netia could reserve future issues for them. Another motion at tomorrowís meeting is an issue for an investor designed a raising PLN140m. If Telia took this stock it would increase its share holding to twenty percent. It is not expected that the share price of Netia will be much effected. After kicking off on the stock market in 2000 at PLN121 it is now trading at around PLN5. Clearly the fact of dilution should logically have a negative effect, the positive side of the coin is the extra funding in the form on debt unloading which is being pumped into the company. Only one year ago Netia said that it wanted to continuing investing and the figure of USD350m was thrown around. For obvious reasons this money is not going to be available. Rumours on the market are of a tie up with another operator and the name of KGHM Telefonia Dialog comes to mind. The unclear ownership situation on the telecommunications market and the fact that France Telecom does not hide the fact that it does not want to place more funds on the Polish market could suggest that the beginning of consolidation could be at hand.