bne IntelliNews -
The government has sacked the top executives of utility Tauron after they dragged their feet over following a state-sponsored plan to support the troubled coalmining industry. The move is a warning for executives of other Polish state-controlled power companies opposed to the government’s rescue plan for the mining sector.
Tauron’s CEO Dariusz Lubera and his two deputies Aleksander Grad and Katarzyna Rozenfeld were dismissed by the treasury-dominated supervisory board, while three other members of the executive team handed in their resignations.
While the utility did not reveal the reasons for the executives’ removal, there is little doubt the government lost its patience over Tauron’s protracted negotiations to buy the Brzeszcze coal mine, part of indebted and lossmaking coalminer Kompania Weglowa (KW).
Buying the mine is now the official line of Tauron’s new CEO Jerzy Kurella, appointed to replace the sacked Lubera on October 1. “Given the current conditions on the commodities market, [buying] mining assets could be a good investment opportunity,” Kurella said in a statement.
Unlike its peers, state-controlled utility Tauron has long said it is ready to invest directly in the coal sector by buying the mine from specialist mining restructuring company SRK, to which Brzeszcze was moved from KW. Tauron’s conditions for the sale, however, apparently caused negotiations on the transaction to drag out.
Tauron insisted the sale is conducted via a public tender, that it will pay no more than PLN1 (€0.24), and that SRK carries out a restructuring - including staff cuts – ahead of the sale. SRK said late on September 30 that the talks were “suspended indefinitely” as the sides failed to reach agreement on terms of purchase, PAP reported.
The Polish mining sector is struggling because of the low price of coal and its poor efficiency of production, and it has been waiting for the government to come up with a strategy to help it avoid insolvency.
The Polish government, led by Civic Platform (PO), has been trying to come up with a solution to ensure KW would not go bankrupt, which would likely seal PO’s defeat in the election later this month. KW is the largest company of the Polish coal mining industry, centred in the politically important southern Katowice region.
The government also hopes to avert protests from the sector’s strong trade unions, which have repeatedly threatened strikes and protests should a plan to save KW not emerge quickly.
Under the latest iteration of the plan, Poland will transfer up to 100% of KW the to a state-owned company TF Silesia, in which state-controlled energy companies will consider taking stakes, the Ministry of Treasury announced on September 30.
The plan assumes transferring KW stakes to TF Silesia, an arrangement, which, according to the treasury, would facilitate investment in TF Silesia by state-controlled power utilities PGE and Energa, as well as by gas company PGNiG.
KW has consistently warned it is on the edge of bankruptcy and needs PLN1.5bn (€355mn) swiftly. However, Warsaw has grown increasingly desperate as a series of schemes to raise the cash have foundered one after the other. The current plan for KW comes after the Polish government withdrew the previous plan in the face of likely objections from the European Commission.
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