Zl.600 million bond issue planned if no steel privatization

The government yesterday accepted a new steel sector restructuring plan under which the four biggest mills, Sendzimira, Katowice, Florian and Cedler, would be merged to create Polish Steel Mills Concern. The government hopes that such a merger will help to improve the disappointing financial results of the companies, and gradually reduce their debts. At the same time, the new Concern would be privatized, since the Treasury cannot afford the hundreds of millions of zloty investment estimated to be needed to achieve profitability. Two anonymous foreign holdings are said to be interested in a purchase. Deputy Economy Minister Edward Nowak also unveiled the government's plan in case the privatization should fail. "Then the Industry Development Agency (ARP) will issue bonds worth zl.600 million," he said. With the funding, the government itself would undertake the sector's modernization. However, analysts say no improvement in the sector can be envisaged without a reduction of up to 9,000 out of 40,000 workers currently employed by the four steel mills. (Gazeta Wyborcza, p. 23, Reuters) M.K.