bne IntelliNews -
Polish state-controlled utility Tauron has restarted talks with state mining restructuring company SRK on the acquisition of the ailing Brzeszcze coal mine.
The move follows the sudden sacking of the previous management because of Tauron's reluctance to seal a deal. The sackings are seen as a warning to several other state companies that have baulked at getting involved in the coal rescue.
Tauron annouced late on October 6 that it was heading back to the negotiating table. The supervisory board of the company had sacked three top executives, with the rest of the executive team handing in their resignations, on October 1.
The sackings followed SRK’s announcement that negotiations to buy Brzeszcze – part of the government’s wider programme to avert financially and politically costly bankruptcies in the mining sector – had failed. Tauron's former board had grown increasingly wary of the deal since agreeing it in May, and had made significant additional demands regarding price and restructuring at Brzeszcze in recent months.
Tauron's new head was quick to assure Warsaw that the company is now ready to lend its hand to the wider cause once more. "After analysing the course of talks on the takeover of the mine assets, including the advanced level of negotiations aimed at setting the terms of the acquisition, we have declared our will to continue talks," Tauron's new CEO Jerzy Kurella reiterated on October 6.
The central element of the coal rescue is to provide capital to Poland’s largest miner KW. Power utilities PGE and Energa, as well as gas utility PGNiG, are now mulling indirect investment via a state fund, as the ruling Civic Platform races to complete the strategy ahead of the October 25 general election. A failure to push the rescue through before then would all but seal a loss at the polls.
That puts senior managers between a rock and a hard place. On the one hand, they lead listed companies, and have all clearly stated that investing in Poland's coal mines makes little economic sense.
On the other, the management boards of all Poland's major state companies are in danger at the upcoming election.
The opposition Law & Justice (PiS) - which has pledged a swift rescue of the mines - looks likely to lead the next government. Should that happen, analysts predict sweeping changes to install new management that will work in line with PiS policy. One told bne IntelliNews at a Polish conference last week: "There are a lot of scared people in this room. If PiS wins, they'll all be out of a job."
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