Treasury looks for Lot solution

The Treasury Ministry has suggested that state-controlled copper-mining business KGHM might buy a 25-percent stake in national carrier Lot Polish Airlines. The idea is part of a government scheme to support the struggling airline, which includes plans for Lot to enter the Warsaw Stock Exchange at the end of this year.

The stake is currently in the hands of the Swissair Group's receivers and, according to daily Rzeczpospolita, could cost KGHM around zł.350 million.

"One of the options we are considering is a purchase by KGHM of Lot shares," Treasury Minister Wojciech Jasiński said. "This is a solution that I would welcome, as long as it does not run contrary to KGHM's plans. The dividend is something important, but if this operation goes through I would count on the dividend being lower."

Representatives of KGHM made no comment following the Treasury Ministry's announcement. The value of KGHM's shares fell 2.9 percent on the day.

The Treasury owns 68 percent of Lot, which in recent years has been struggling to compete with an influx of budget carriers, including Ryanair, Wizz Air and SkyEurope. Last year the carrier saw its passenger numbers rise by a paltry 1.7 percent. "We cannot allow the national air carrier to go under. What we want is for Lot to be able to function independently, possibly within some kind of alliance," Jasiński added. (Reuters)