PKP zl. 1 billion bond issue to be bought by the state

Polish State Railways (PKP) has planned to issue bonds worth zl. 1 billion on October 4. This is said to be the biggest success of the enterprise since it transformed itself into a group of independent companies a year ago. The issue has been 100% guaranteed by the state, which has promised to buy the bonds, and pay zl. 1.77 billion by 30 April 2010. Local lines in PKP Przewozy Regionalne will receive zl. 300 million from the issue as they are on the verge of bankruptcy due to cuts in state budget subsidies. The remaining money will be used to pay off outstanding liabilities. "Dividing the whole company must be tied to restructuring the whole company. PKP needs to shrink the number of its employees as it has recorded a drop in turnover and its costs are far too high. All of these reforms could not be done it one year, but over the last 12 months PKP management has done almost nothing," said Henryk Klimkiewicz from Association of Economical Advisors TOR. (Puls Biznesu, pp. 1, 10) M.M.