Polish Business Survey
Agros restructuring
Agros has announced that it wishes to concentrate on fruit and vegetable processing and to promote those brands that are well known such as Fortuna, Krakus and Tarczyn as well as distributing Polish vodka abroad. To this end it will sell or close those companies it owns which are not part of its core business either to the workforce or other investors. However the company also may be prepared to dispose of several vodka brands. Agros has spent the second half of this year restructuring.
Pierre Denetre, MD of the company says that it is vital to reduce costs. One of the things he is currently attempting is the sale of the Warsaw HQ of the company. The building is worth tens of millions of dollars and funds raised in this way would be used for restructuring.
Agros is not expecting to generate a great deal of cash from the companies it is attempting to sell. It has sold wine producer Torwin, a mill in Leszno and Agros Dobramyśl. However many of these companies have debts to the mother company and they are often sold at a loss.
Even in instances where there is a profit, Denetre admits that it is minor. Agros is counting on increasing sales of the Wyborowa brand abroad. As Agros Trading has a limited distribution network it has handed foreign distribution over to its strategic investor Pernod Ricard. This will mean discontinuing contracts with current partners and possibly paying compensation if contracts are broken before they end.
Only a few months ago Agros was arguing that it would have to pay millions of dollars in compensation if foreign rights to certain vodka brands were taken away from it. Now it seems that the company can live with this, maybe thanks to a promise from its investor to improve the position of Wyborowa on international markets.
Agros is also the owner on international markets of other brands such as Krakus and Extra Żytnia. However sales are poor. The right to own these brands has been the cause of a long battle with Polmos since 1991.
Long distance decision
Today management of Energis Polska (formerly called NG KT) will make a final decision if it is to pick up its long distance concession licence or not.
It is believed that the company will decide to take the licence for which it will pay EUR23m.
The company is the result of a joint venture between the Polish rail operator PKP, the British National Grid and Energis. It is to invest USD300m in the next twelve months. These funds are to be guaranteed by the British owners of the company.
The company has signed a USD46.5m rental contract with the PKP and USD51m with Ericsson for voice and data transmission equipment.
Energis Polska will employ 220 people before the end of next year, currently it employs 40 specialists. It is not expecting to have an operational profit for four years.
Polfa Kutno to sell surplus property
Enterprise Investors, the American venture capital fund which recently increased its share of Polfa Kutno to 74.5 percent is to begin preparations to sell the medicines factory in the second half of 2001. In the meantime management plans to finish restructuring the company. It believes that sales next year will be around PLN198m. Polfa will also be selling surplus real estate.
Splitting shares
Today shares of the Skoczów based Skotan leather company are to split on a ratio of one to three. The object of this is to improve liquidity on the stock market and a higher market rating for the company.
PBK reducing insurance stake
PBK bank announced last week that it will reduce its share or even completely pull out of Royal PBK insurance company. The British Royal & Sun Alliance currently has a 60 percent stake in Royal PBK. The rest belongs to the Polish bank. It is believed that the British may want to increase their share in the insurer.