3 Min Read
WARSAW, March 10 (Reuters) - Poland's coking coal producer JSW will pursue a plan to issue more shares, it said on Friday, bucking analysts' expectations it would drop the plan given a surge in coal prices and improving results.
"We plan to issue (shares)," a JSW spokeswoman said in an e-mail to Reuters on Friday.
State-run JSW, which only just avoided collapse when coking coal prices slumped in 2015, had planned a share issue of 500 million to 800 million zlotys ($120 million to $200 million).
But with rising coal prices set to boost JSW's results, analysts had not expected it to raise new capital.
"No new share issue assumed, given massive cash generation in fourth quarter 2016/first quarter 2017," DM BZ WBK had predicted.
A surge in coking coal prices in the fourth quarter will help JSW swing into net profit for that period, analysts said.
"We believe that the state might not sell JSW's share rights, so that the SPO (secondary public offering) story might be actually gone for good," DM BZ WBK, which sees JSW net profit in 2017 at a record high 3.4 billion zlotys, said in its research note.
Sources familiar with JSW's plans said it will delay any share issue until its most troubled coal mine, Krupinski, is finally set to close, to avoid union pressure to save it.
As part of a deal with its bondholders struck last year, JSW pledged to transfer Krupinski by the end of the first quarter to the state mining restructuring company SRK, which will eventually wind it down.
The unions hope the mine will survive.
"One cannot show to the unions that there is too much money in the company," a person familiar with JSW plans said.
"If the share issue materialises before Krupinski is moved to SRK, then the miners could say that the company has the money, so perhaps there is no need to close that mine," another source said.
Two years ago JSW unions contributed to the resignation of the company's CEO.
Earlier this week JSW's Krupinski miners' wives and women working in the mine protested against the plans to close the mine in front of the prime minister's office.
Shares in JSW jumped by over 500 percent last year and the company is set to return to the Warsaw blue chip index WIG20. ($1 = 4.0779 zlotys) (Reporting by Agnieszka Barteczko and Anna Koper; Editing by Ruth Pitchford)