Polish state-owned operator PKP Cargo decided not to submit the request for approval for its plan to fund the repayment of its debt via the issuance of N shares. “This does not mean abandoning the idea of raising capital, but rather the need to adjust the parameters of the future issuance”, the company said.
There are a few main reasons behind PKP Cargo’s decision to suspend the process. The first one is “the need to adapt the planned financing to the current course of the restructuring proceedings”. For example, PKP Cargo recently asked that half of its debt should be repaid by the state via compensation for the so-called coal decision.
The second one is “the ongoing review of the company’s financial and operational situation conducted by the restructuring administrator”. A new administrator was in fact appointed at the beginning of October after the whole Management Board resigned after a court decision reducing its responsibilities.
PKP Cargo added that the “current situation is a result of the difficult expectations of some creditors”. Finalising an earlier arrangement with the creditors would have represented the end of the restructuring procedure the company started two years ago. Now, however, the deadline for said arrangement has been waived without a new one being in place yet.
The repayment plan
PKP Cargo’s plan to repay its creditors was ambitious to say the least. When the company shared it, it said it would manage to extinguish its €690-million debt by next year instead of 2036 as initially scheduled. The scheme entailed three methods. Debt repayment, debt write-off and conversion of the debt into equity, though ensuring that PKP remains the majority shareholder.