Negotiations on HK privatization slower than expected

Negotiations on the entrance of strategic investors into the Huta Katowice (HK) steel mill are going slower than expected. The mill will be separated into three parts: HK Stal, HK Long and HK Flat. The British-Dutch Corus Group is to invest $500 million in HK Long, while Danieli would become an investor in HK Flat. However, the privatization plan depends on the approval of the Treasury Ministry and HK creditors. The Ministry will accept the plan if HK and potential investors prove they can find a market for new products. This could be a problem as the European Union (EU) does not want Polish steel mills to increase production of high-value-added steel; the EU's steel production capacity is 10 million tonnes higher than the total market size. Yesterday the Treasury Ministry met with HK management and Corus Group representatives, but did not sign a preliminary agreement on privatization. HK and Corus are still working on a business plan. (Puls Biznesu, page 3) T.J.