Polish Business Survey
Gdańsk mayor wants more beer money
The local authority in Gdańsk wants the Żywiec brewery to pay it over PLN67m damages which it claims is owed for the Hevelius brewery.
In 1995 the Gdańsk local authority gave a 51 percent share in the Hevelius Brewing Company (HBC) to Brewpole in exchange for a promise to invest USD15m in the company over the following three years. Brewpole invested USD16m in the company although the authority does not recognise this investment. It claims that these funds were raised from profits and not from the investors own cash.
Dagmara Lipka-Chudzik of the Żywiec legal group finds the position of the local authority hard to accept. She says that in 1995 the aim of the agreement was to strengthen the brewery and this is exactly what happened. She believes that the authority is making these claims in order to make up shortfalls in its own budget. Zbigniew Czepułkowski, deputy mayor of Gdańsk, says that he is sure a court will share his opinion and once he has the money he will use it for road and bridge improvement.
In February the authority lodged a claim in the local courts in Bielsko - Biała where Żywiec is based. Żywiec is the main shareholder now of Elbrewery to which the Hevelius brewery belongs. The authority is demanding USD15m which today is worth more than PLN67m which it claims it is owed for the brewery. The court has yet to make a decision however it has put a bar on Żywiec selling HBC, Elbrewery or Warka which are the companies involved in the affair.
Off the rails
Krzysztof Celiński, MD of rail carrier PKP is expecting a law to be passed around the end of September which will prepare the company for restructuring and eventual privatisation. One of the effects of this law would permit the PKP to run up more debts. At the beginning of May it owed almost PLN6.3bn. It is close to concluding negotiations with a number of creditors and at the same time it is hoping to haul in some of the cash it is owed, mainly from steelworks and coke producers. At the end of April it was owed more than PLN2bn.
Even without waiting for the law to be passed it is hiving off those parts which do not deal directly with transport. It has already made separate companies from three printing houses and a holiday camp. It will shortly make a separate company from the local railway service that links the Gdańsk - Gdynia region (SKM) and the narrow guage railway between Hutniczo and Siarkowa. Krzysztof Celiński also said that an offer has been issued to run the local Warsaw lines (WKD) which has been responded to by ten companies.
The WKD and SKM receive very little subsidy from the PKP. This is not the case for the regional carriers. Closure of a further 4,500 km of line has been announced. Lines now need to be at least 20 percent self sufficient and trains 25 percent full in order to keep running.
More power to insurance watchdog
Yesterday the first reading in parliament was held for a bill determining the activity of insurance companies and the financing of their watchdog institutions which should find themselves strengthened.
Share issue for Silesian fund
The Upper Silesian Fund (FG) has decided upon its strategy for the years 2000 -2006. This will include greater involvement in raising funds for the development of companies in Silesia as well as share issue which is designed to raise PLN260m.
Drinks producer develops water line
Warsaw based soft drinks producer Hoop has launched its own series of mineral water under the brand name Arctic. The company is also hoping to purchase one of PolandŐs mineral water sources. In August it will begin production of an energy drink called Koop. This year the company intends to spend USD15m on developing production.
PKN prepares for second tranche sale
A majority of analysts has suggested that the share price of the second tranche of fuel concern PKN Orlen will be lower than the current stock market price and probably be around the PLN20 - PLN21 level. This is of course higher than the first tranche which the treasury offered at PLN19.50. Pricing at this level should generate a lot of interest from both foreign and domestic buyers.
PKN finds its colours
PKN has united its network of fuel stations under the new brand name of Orlen which it is promoting in a massive publicity campaign. Fuel specialists now think that the company should try expansion abroad.
Prokom to issue bonds
During the next three years Gdynia based systems integrator Prokom intends to issue bonds for a value of PLN100m. This will be the largest ever issue of bonds by a company working in the IT sector in Poland.