Top official says gov't mulling guarantees for steel sector modernization

Poland's government is considering state guarantees for loans needed to modernize Poland's ailing steel sector prior to its privatization, Deputy Economy Minister Edward Nowak said on Thursday. The government is now preparing a proposal to consolidate the sector, lift the profile of its output, reduce its work force and restructure debt, a plan that has yet to be approved by the cabinet or discussed with labor unions. "We want to limit investment to an absolute minimum, some z?.2.2 billion-z?.2.3 billion ($530-554 million) in those areas which boost revenues... Government guarantees for loans would help to quickly get the modernization process going," he said. Under the plan, four of the country's largest steel mills, Katowice, Sendzimira, Florian and Cedler, would be consolidated and sold to either one or a group of investors. According to Nowak, the consolidation process should be kicked off around June 30. Earlier this month Voest-Alpine withdrew from a consortium consisting of French Unisor and Luxembourg's Arbed SA, which have since announced plans to merge, and Germany's ThyssenKrupp, interested in taking part in the privatization of the Polish mills. (Reuters) J.K.