Corus defects from Huta Katowice privatization plan

British-Dutch steel concern Corus has broken off talks about participation in the privatization of steel mill Huta Katowice S.A. (HK), which has $576 million in debts. Plans had included the creation of a joint venture between HK and Corus under the name HK Long, in which Corus would have had more than a 31% stake, the European Bank for Reconstruction and Development (EBRD) 20%, with debtors holding a 19% stake. Corus's withdrawal leaves HK on the verge of bankruptcy, and thus the Economy Ministry is considering raising HK's share capital. The talks were broken off due to uncertainty over HK's huge debt and trepidation about the overall restructuring of the Polish steel sector. "Corus did not want to agree to EBRD requirements for financing the project," said EBRD executive director Jan Krzysztof Bielecki. "It is too early to talk about the company's bankruptcy. This is not the direction in which the talks are going on," added Janusz Jedroch from HK press office. According to Polish Press Agency (PAP), the State Treasury is now analyzing ways HK could raise capital. Deputy Economy Minister Edward Nowak said that one possibility is that the Treasury could increase HK's capital through the introduction of shares of another company. (Rzeczpospolita, pp. A1, B3)