Despite the current weak state of the financial markets, the Gdynia shipyard group (GSG) is pursuing plans to enter the Warsaw stock market. Marek Roman, director of business consultants EVIP and one of the shareholders of GSG, says that had the Szczecin shipyard not fallen into difficulties then a prospectus would have been prepared for the stock market this quarter. As things stand at present with the sector under pressure and the stock market at what appears to be a low point then a prospectus is not likely until the second half of this year or the beginning of next.
GSG was originally hoping to raise around PLN400m on the Warsaw stock market with some GDRs to be noted on the London market. Marek Roman is unwilling to state how much the group is now hoping to raise but maintains that funds will largely come from the Warsaw bourse.
Marek Roman believes that the pension funds could be prepared to pump cash into the shipyard and as received signals to this end. This of course will be possible once the shipyard goes public. EVIP has stated that it will retain a stake in the company following a stock market entry.
Janusz Szlanta, managing director of GSG says that a stock market entry will also depend on the financial condition of his group.
Szlanta notes that the problems of the Szczecin shipyard have hit the industry badly. An important element is also the financial state of the whole sector. Shipbuilding is financed through short term credits. Due to the cash flow difficulties of the Szczecin shipyards banks are treating the whole sector in general, and the Gdynia yards in particular, with more care than normal. Last year Gdynia needed around USD50m per month and that amount was paid by new orders coming in. He admits that it is now more difficult for the group to keep its head above water.
Marek Roman adds that a dispute with the treasury has somewhat cooled down. The shipyard is demanding over PLN100m compensation from the treasury claiming that the ministry unnecessarily made it raise its capital on privatisation causing it unnecessary losses.
Without waiting for an IPO, GSG hopes to have a new development plan ready before the of next month.
Janusz Szlanta says that the former plan placed much emphasis on quick development. The next one will be based around stabilising turnover and cost cutting. The organisation structure will be changed and productivity will be improved. The amount of work performed by intermediaries will be reduced. Around 25 - 30 percent of all work is currently outsourced and Szlanta believes that this could be performed by his own company particularly if the resources of the Gdansk shipyard were brought into the equation.