Government offers LOT zl.400 million bail-out package

The government yesterday approved an emergency aid plan designed to keep ailing national air carrier LOT flying. The company will be offered zl.400 million worth of Treasury-held stocks to use as collateral in obtaining the loans it needs to continue its operations. The stocks are a 2.42% stake in Bank Pekao S.A., 2.5% in the KGHM Polska Miedz copper conglomerate, and 26% in metal trader Impexmetal. "The market value of the shares today is zl.400 million, and such is the limit of the credit LOT will be able to take," said government spokesman Krzysztof Luft. However, the Rzeczpospolita daily disputes this valuation, and calculates that the share package is worth just zl.355.5 million. Explaining the reason for offering the assistance, Luft said, "The government's decision comes in the wake of the terrorist attack in the US and is a direct response to the situation on the international civil aviation market." In return for the shares the State will increase its stake in the airline. "Without the aid, there is a risk that LOT would be grounded in several weeks," Luft explained. LOT saw its net loss triple to zl.252 million in the first half of 2001. Its financial woes have been compounded as a result of the difficulties of its strategic investor Swissair, which is likely to dispose of its stake in the Polish national carrier. (Rzeczpospolita, p. B1; Reuters) J.K.