Railways set to receive zl.500 million EBRD credit

The European Bank for Reconstruction and Development (EBRD) looks set to offer Polish State Railways (PKP) a zl.500 million loan to help with its restructuring. Reports in Puls Biznesu say the loan would be guaranteed by the State Treasury and would allow the company to fulfill its financial obligations until a planned bond issue could take place at a later date. Analysts suggest that by providing the loan, the EBRD would effectively gain confirmation as the agent responsible for the PKP bond issue, and that this in turn would mean a reduction in the issue from zl.2 billion to an estimated zl.1 billion. PKP is in serious need of capital to finance its current business activities, but its original plan to raise funds through a zl.1.3 billion bond issue this year was thwarted when it was ordered to repeat the tender for an agent. The PKP board is to draft by the end of the week alternative proposals for obtaining financial support for the restructuring. (Puls Biznesu, p. 4) P.J.