Polish Business Survey
Fishy capital increase
The treasury may be about to reform the Odra deep water fishing company which could lead to it s capitalisation being increased and converted into a private limited company owned by the government. Nonetheless the company is not too keen on these plans arguing that they will harm the company which has had difficulty paying its debts.
Treasury steels itself
It has been reported that new treasury minister Andrzej Chronowski may decide to open a concern called Polska Stal which would link all the largest steel companies in State hands.
DaimlerChrysler backs reform
DaimlerChrysler Leasing yesterday decided to pull out of the leasing company association KPL. The decision was made as a result of what the company sees as the dominance of small leasing firms within the KPL which have prevented reforms.
Conforama to open Polish store
Before the end of the year the first Polish shop of the French interior design group Conforama will open. The company is claiming that it will open ten shops in Poland at a cost of FRF600m.
State delays investment
Civil servants from the interior ministry are still delaying the purchase of Warsaw brewers BW by the Austrian Brau-Union. Permission by the mergers and competition watchdog was granted more than six weeks ago. The administration is delaying a claimed investment of PLN200m.
Carrier capitalised
The treasury is to increase the capitalisation of sea and road freight carrier Transocean as part of a global restructuring of the Szczecin based company. Transocean is not likely to be privatised in the near future.
Solution for connections problem
The telecommunications ministry has agreed to reduce the amount to be paid by El-Net for its Warsaw concession. The amount has been reduced from EUR245m to EUR140m. The reduction was part of a compromise agreement which allows Netia to also operate a concession in the capital.
Only foreigners for Prima
Prima Best Western is about to commence the extension to its Wrocław hotel. The hotel was originally opened in October 1999, the first hotel that Prima opened in Poland of a planned chain of forty.
Jan Kędzierski, MD of Prima said that the number of rooms would be increased from 79 to 230. Furthermore a new hotel will be finished in Łódź and next year hotels in Gliwice and Poznań will be handed over. At the end of 2001 a 250 room hotel will be opened in Warsaw to be followed by hotels in Lublin and Gdańsk. Jan Kędzierski also claimed that the company is also planning a network of thirty cheaper hotels called Arizona. Their construction will cost around USD3m each.
Nonetheless the company s plans to finish the hotels in Gliwice, Poznań and Lublin exist only on paper.
One of the reasons for this could be a lack of financial fluidity. Prima is said to have major debts owing to the builders of its Wrocław hotel.
Jan Kędzierski claims that the company had a different idea of the time and quality of the work . For example he said that the bill for the carpeting was enough to carpet three hotels completely . The matter is now in the hands of the courts.
He admits that it was a mistake not to choose a general contractor and his company had to deal directly with many sub-contractors.
He says that Wrocław was a valuable lesson, commenting that whereas the Polish construction industry is now using new technology its mentality has not changed. In the future Kędzierski says that they will only use foreign general contractors.
Prima s problems do not finish in Wrocław. In Łódź they have been building a hotel since the end of 1998. The land was bought from Zasada Ltd, and Prima agreed to finish the hotel before the end of last year. Failing to meet this deadline, Łódź authorities had to fine the company up to 25 percent of the value of the investment, increase the rates or extend the terms in which the building had to be finished.
Jan Kędzierski claimed that the building had to be finished to pre-fit out condition from the company s own resources, however this was not the opinion of MitteleuropŠische Handelsbank Aktiengesellschaft, who supplied the credit and decided to reduce the amount they were prepared to forward. Jan Kędzierski says that this caused the delay.
As a result Prima has to increase its capital value in order to use more of its own resources and reduce its credit.
Prima s MD admits that the Łódż hotel is several months behind schedule but claims that it will be finished before the end of the year.