Polish coalminer JSW potentially interested in acquisition of Czech NWR - director

By bne IntelliNews April 8, 2014

WARSAW (IntelliNews) -- Jastrzębska Spółka Węglowa (JSW), Poland’s largest listed coalminer, is potentially interested in an acquisition of the Czech Republic’s New World Resources (LSE:NWR), a company director told IntelliNews/Capitol Intel.

JSW is not, however, sure of support for such a move from the state, its controlling shareholder with a 55.17% stake, the source said. 

NWR needs a capital injection of at least CZK 3bn (EUR 109m), if it is to avoid bankruptcy, Czech minister of trade, Jan Mladek, was quoted as saying Monday. BXR, the investment vehicle of Czech magnate Zdenek Balaka, has said it is ready to pump such a sum into the business on the condition of a change in the NWR’s ownership structure.

At present, BXR holds a 63.58% stake in NWR. The troubled company is headquartered in the Netherlands and listed in London, Prague and Warsaw.

For JSW, any deal would be a considerable challenge, given NWR’s poor results and debt pile, the source said. NWR posted a EUR 466m net loss in the fourth quarter of 2013, a figure that includes a EUR 407m asset writedown.

Its net debt amounted to EUR 625m. In addition, JSW expects tough market conditions to endure for several quarters, which argues against acquisitions at the present time.

On the other hand, the difficult market offers an opportunity to snap up assets on the cheap, while JSW has the potential to take on significantly more debt. Moreover, JSW, Europe’s largest coking-coal producer, is keen to diversify into higher-quality coal. Poland’s economy ministry torpedoed plans by JSW’s management to make a bid for Bogdanka, a smaller Warsaw-listed miner, in 2012, when NWR made an unsuccessful bid for the company, a ministry source said.

The ministry continues to harbour doubts that acquisitions are the most effective way to spend the state-owned company’s cash, especially in the current market conditions. But the question of a bid for NWR has not yet come up and would be given due consideration by the ministry.

One difference with Bogdanka, which had undergone a successful privatisation, is that an acquisition of NWR by JSW would not amount to a re-nationalisation of a Polish company, the source added. Nevertheless, a large acquisition may prove problematic at a time when JSW does not rule out cutting capital expenditures in case of continued challenging market conditions, the ministry source said.

JSW is already in talks to acquire the Knurów-Szczygłowice mine in Poland, a deal priced in the hundreds of millions of zloty, the ministry source said. The NWR deal would not be much larger, though would mean taking on a large amount of debt. NWR shares traded on 8 April at 25% above their February low, giving the company market capitalisation of GBP 105m (EUR 127m). JSW plans capex of PLN 2.170bn (EUR 520m) in 2014, up 23% over the previous year. Chief Executive Jarosław Zagórski said it would be a challenge for JSW to replicate last year’s financial performance, when the company posted earnings before interest, tax, deterioration and amortisation (EBITDA) of PLN 1bn (EUR 240m).

by Aleksander Nowacki in Warsaw

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss