Polish Business Survey
TK bought land from wrong seller
The appeal court in Katowice has ruled that land that steel mill Huta Kościuszko sold Danish developers TK Development two years ago was not theirs to sell. A deposit of USD2.5m together with interest may have to be repaid to the Danes. The site measures nine hectares and is located in the centre of Chorzów alongside the main road to Katowice. The court has ruled that the right to use the land did indeed belong to the steelworks but the ownership remained with the local authority.
TK Development wanted to use it to build an entertainment and shopping centre. An initial court hearing ruled that the mill owned the land at the time of the sale although this decision has been overturned on appeal. Management of Huta Kościuszko decided to sell 80-90 of the plots it owns in order to pay its debts which include the company s headquarters and two holiday camps.
Hortex finds buyer for factory
Foodstuffs producer Hortex has found a potential buyer for its frozen foods and fruit factory in Środa Wielkopolska to the south of Poznań. A farming cooperative has offered to pay PLN6.5m for the factory. The cooperative has also agreed to pay Hortex s debts to BGŻ bank which are greater than the value of the plant. Hortex has until the end of the month to find buyers for factories in Leżajsk, Płońsk and Siemiatyce, if not they will be closed. The food company has been losing money for several years, which was made worse by the Russian crisis which drastically cut the greatest export market. Its plan for this year was to sell PLN100m to the east although it is now obvious that only thirty percent of this sum will be realised.
Transsystem aims at bourse
Transport system designer and constructor Transsystem has increased its capital to PLN2m and converted itself into a public limited company (SA) as a prelude to a stock market entry. The company exports the lionŐs share of its products.
Investors for Silesian privatisations
Nineteen state owned firms from the three provinces controlled by the Wrocław section of the treasury are to be privatised, ten of them have already found investors. This project has been financed by the European Union as part of the PHARE 96 program.
Cobblers in social security hassle
Shoe maker Chełmek is trying to get the social security (ZUS) to agree to accept PLN15m it owes in installments. If not the company will declare bankruptcy and to this end petitioned a court on 18 February. The company is in a difficult situation, it could get orders such as one for 300,000 pairs of boots for EU military forces but would require new technology to make this possible. However as it owes money it cannot obtain credits. Therefore it can only fulfill thirty to forty percent of orders that it receives. It currently employs 600 people but since March it has not been able to pay any salaries. MD Jerzy Repeta thinks that drastic job cuts are not required and that only about 15 percent of people will lose their jobs. The sector is going through bad times at the moment, other shoe companies have diversified or gone out of business. Foreign companies have shown no interest in producing in Poland although selling is a different story. Andre for example plans to spend PLN400m on building a retail network whilst But Hala intends to invest a further PLN100m.
Road builders merge
At the beginning of next month two Szczecin based road construction companies could merge and enter the stock market. They are PEDiM and PRInż. The majority shareholder in both cases is Komfort, the largest Polish retailer of carpets and rugs. The new company hopes to benefit from contracts such as the maintenance of Szczecin s roads and the construction of motorways. Both companies had a profit in excess of PLN1m last year.
Brewery to issue bonds
The Strzelec brewery from south east Poland has decided to issue bonds for a value of PLN40m. These bonds will be issued in the second half of this year. This will permit the company to increase production from 300,000 hectolitres to 450,000 hectolitres. New purchases will include eight fermentation tanks and a new line which has a capacity of 20,000 cans per hour. At the same time the company has entered into negotiations with the Austrian Brau-Union. Strzelec is one of the very few breweries which has remained independent. Brau-Union is in the process of building a Polish group. It has recently obtained Van Pura from Rzeszów, almost finalised the purchase of Browary Warszawskie and is the strategic investor in the Bydgoszcz based Kujawiak brewery. In the first four months of this year Strzelec increased sales by sixty percent over the previous year which is the highest in the entire sector.