BRE Bank bond purchase gives Elektrim helping hand

BRE Bank has bought zl.220.5 million worth of bonds issued by conglomerate Elektrim from insurer PZU Zycie, helping the power and telecoms group avoid a lengthy legal battle and possible bankruptcy. Last month PZU Zycie demanded an immediate buy-back of the bonds, after Elektrim signed a strategic agreement with Vivendi of France, a deal which the insurer claimed had violated the issue covenant. The demand was a major threat for the cash-strapped Elektrim at the time, but now the group has some breathing space thanks to the BRE Bank bond purchase. Elektrim is due to buy the bonds from BRE Bank by April 24 at the latest, for their purchase price plus interest charged at 19.5% annually. (Prawo i Gospodarka, p. 10; Reuters) T.J.