Elektrim: Now a summit
"Elektrim, Vivendi and Deutsche Telekom should sit down and resolve that issue," said Janczyk, Elektrim a week after he rescued the company with a €510 million package from bankruptcy proceedings in a Warsaw District Court. Three of the highest profile court cases filed against the Polish conglomerate involve Deutsche Telecom and indirectly, Vivendi.
The German operator has three separate claims pitched against Elektrim. First, in an ongoing dispute since 1999, it contests in the Vienna arbitration court Elektrim's purchase of a majority stake in PTC, alleging its first right of refusal to buy the stake was overlooked. A second lawsuit claims Elektrim's transfer of the its PTC stake to the Vivendi-ET joint venture violated the terms of original agreement. Third, DT charges that Elektrim is in a state of "economic impairment", a status that would allow it to buy the PTC stake at a sharp discount.
"Frankly resolving any of those issues is mind-boggling," Janczyk admitted.
Yet, Janczyk said Elektrim should be able to weather all litigation, especially the last case because its recent agreement with bondholders pulled it out of a state of "economic impairment" in which its liabilities would be greater than its assets. He also called for speedy and prompt negotiations to resolve the issues.
"My view is that this is all nonsense," he said. "And we should all sit down around the table and agree to something amicable.
"This is something where each of the parties spend millions on lawyers, or we can just sit down at the table and be sensible."
Lawsuit scenarios
All lawsuits would need to be decided in a single deal for real progress to be made on the sale of both ET, which owns 51% of PTC, and PTC itself. Cash from either transaction is vital to Elektrim's promise to pay convertible bondholders €453 million by Dec. 15. (See feature story page 11)
Janczyk's desire to settle out of court also stems from his deep scepticism of the Polish legal system.
"Theoretically in the worst possible scenario, which is hard to believe would happen, we lose all three lawsuits," he said.
"That raises the question, what happens then? How do we untangle this story? Under the Polish legal system, I doubt there is any rational scenario."
Poland's longest running corporate drama has the capacity to run for some time yet.
