Cabinet consolidates steel mills, offers equity for debt

The cabinet yesterday gave the green light for the formation of Polskie Huty Stali (PHS). The government said that the new enterprise will be composed of four major steelworks: Huta Katowice in Dabrowa Gornicza, Krakow's Huta Sendzimira, Huta Cedler in Sosnowiec and Huta Florian in Swietochlowice. As a result, 70% of steel production will be made by one company. Urgent restructuring is needed as the steel industry has huge debts and is on the edge of bankruptcy. Last year the losses of Poland's two largest steelworks, Katowice and Sendzimira, amounted to zl.1 billion. The plan is for Economy Minister Jacek Piechota to form PHS by transferring 85% of the shares of the four mills into the new company, and leave 15% of the shares for the e mployees. After the company is officially registered on May 10, shares of Huta Czestochowa will be added to the group. After giving creditors the choice to acquire shares of PHS, the new company could be sold to a st rategic investor. Interested parties include Ispat, an Indian consortium, and Euroconsortium, formed by companies from the European Union. (Gazeta Wyborcza, p. 21) A.K.