Poland to convert part of KHW's debt into shares of PGG

Poland plans to convert 30-35 percent of Katowicki Holding Węglowy PLN 1.4 billion debt into shares of the merged Polska Grupa Górnicza (PGG)-KHW, deputy Energy Minister Grzegorz Tobiszowski said, although he admitted that such idea will be hard to accept for the banks involved in the transaction. Several Polish banks are KHW bondholders and would have to approve such deal. The banks are expected to meet with the ministry officials this week. “Such conversions would help us in talks with the EU regarding the rescue plan,” Tobiszowski said. The potential merger will incorporate KHW into PGG in order to save the fledging company. KHW has unpaid matured bonds worth over PLN 1 billion. The new, enlarged PGG will require PLN 1 billion in recapitalization.