Economy ministry says 'no' to HK's bailout proposal

Troubled steel mill Huta Katowice, facing debts reaching zl.2 billion, received negative feedback from the Economy Ministry yesterday about its proposal made earlier this week to the Treasury to increase its capital by $160.2 million, possibly through an issue of shares to its creditors or a transfer of capital from another state mill. Edward Nowak, deputy economy minister in charge of the steel sector, said the problem with Katowice would in the end not be resolved by pumping more funds into it, but through restructuring its production. The final decision on increasing HK's capital, however, rests with the cabinet as a whole and the Treasury Ministry, which has a keen interest in privatizing HK. Last month the cabinet set up TF Silesia, which received shares in other state-owned companies to guarantee loans to the steel mill when creditor banks threatened to stop financing it. "The company has no acceptable restructuring plan. It is not fair to simply stand up and ask for more funds," said Nowak. He added that the government had received signals from several foreign companies willing to jointly buy stakes in steel mills Huta Sendzimira, Cedler and Florian as well as part of HK. "These are large European, American and Japanese steel concerns," said the deputy minister. (Reuters, Prawo i Gospodarka, p.5)