Bank PKO BP steps in to help steel-mill restructuring

The Industrial Development Agency (ARP) has signed an agreement with state-owned bank PKO BP regarding the issue of zl.600 million-worth of five-year bonds to finance the restructuring of national steel conglomerate Polskie Huty Stali (PHS). The zero-coupon bonds will be issued by ARP at a 35% discount to the banks crediting PHS and guaranteed by the State Treasury. "These bonds will help the mills settle with creditors, reducing the debts of the steel mills comprising PHS, thus improving their liquidity and credibility," said Economy Minister Jacek Piechota after the agreement was signed. Piechota declared that by the end of August his Ministry would draft a modified restructuring program for the steel industry, taking into account suggestions from the European Commission (EC). He added that he would like the EC to approve PHS's business plan by the end of September. The steel mills last year recorded a loss of zl.1 billion. (Gazeta Wyborcza, p. 29) T.J.