Government arranges bridge loan for Huta Katowice

The government has arranged a bridge loan for Huta Katowice in an effort to enable privatization of the ailing steel mill and thus save it from bankruptcy. Privatization plans suffered a major blow two weeks ago when the British-Dutch group Corus withdrew from negotiations to acquire a strategic stake in one of Katowice's divisions. After this setback, plant management had asked the government to guarantee Huta Katowice's huge loan portfolio, as the company was facing insolvency if banks refused to provide additional funding. "The government will not provide guarantees for the firm's banking loans, as that would be against our policy," deputy Economy Minister Edward Nowak told Reuters. Instead, a state bank would grant Huta Katowice a bridge loan, allowing it to continue restructuring and searching for a strategic partner. The press offices of all three state banks, PKO BP, BGZ and BGK, denied any knowledge about the loan; Huta Katowice is currently negotiating, however, with Italian group Danieli and CVRD of Brazil regarding their participation in the privatization. (Rzeczpospolita, p.B2)