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18 November 2014 | by Gabor Chodkowski-Gyurics

Polish coal makers fail to find financing abroad

Polish coal makers fail to find financing abroad
Kompania Węglowa and JSW, two of Poland’s largest coal companies, are facing difficult end of the year, after their foreign bond issues failed to attract investors’ interest in November.

Jastrzębska Spółka Węglowa (JSW) attempted to place a bond issue on November 3, but the investors assessed company’s situation as risky enough to merit an interest rate of 10-12 percent. The value of the failed bond issue was not disclosed, but JSW needed cash for investments, having bought a mine from state-owned competitor Kompania Weglowa (KW) earlier this year for €353 million.

Two weeks later, KW’s own attempt to raise €413 million failed, after the offer did not receive attention from US investors, citing lack of interest in the coal industry in general, owing to falling prices of the commodity worldwide. London investors demanded in turn that state owned BGK Bank or state owned utility PGE were also involved.

This has left KW in a difficult position, with as many as 12 out of its 15 mines operating at a loss.

The Polish government’s is expected to table a rescue plan for the mining sector by end of 2014. Polish coal mines posted a net loss of PLN 772 million (€180 million) in the first half of 2014, compared with profit of PLN 16 million (€3.73 million) a year earlier, according to Economy Ministry.


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