WARSAW, Sept 7 (Reuters) - Poland plans to transfer part of its stakes in gas group PGNiG, utility PGE and insurer PZU into an investment fund that will use them as collateral to raise cash for cash-strapped coal miner Kompania Weglowa.
The Treasury Ministry will ask the cabinet to approve the transfer of a 2 percent stake in PGNiG, a 1 percent stake in PGE and a 1 percent stake in PZU to a state-controlled fund TF Silesia fund, Deputy Treasury Minister Wojciech Kowalczyk told reporters on Monday.
He said the stakes were worth a combined 1.4 billion zlotys and the ministry did not expect the fund to sell them on the market, but use them as collateral instead to obtain loans, Kowalczyk said.
These would be used to aid Kompania Weglowa, which sustained a 1.13 billion zlotys loss last year and continued to lose money in the first half of 2015.
Kompania Weglowa, the European Union’s biggest coking coal producer, has been trying to restructure but has struggled to find investors. The hard coal miner, which employs 50,000 people, is struggling because of a fall in coal prices and high production costs.
Kowalczyk said that state-controlled energy firms, which the ministry expected to invest in Kompania Weglowa, have not expressed any interest in doing so.
As part of the plan, TF Silesia is expected to provide 1.2 billion zlotys with another state-controlled fund FIPP providing 300 million zlotys for the rescue plan, Kowalczyk said.
The government is trying to support Kompania Weglowa ahead of the October parliamentary elections, but at the same time act in line with European Union law that puts stringent conditions for government support for ailing industries.
Kompania’s chief executive Krzysztof Sedzikowski said the company expected to get commitments from the two funds by Sept. 20.
Sedzikowski also said the financing deal must be signed by end-September for the New Kompania Weglowa, the entity to replace Kompania Weglowa, to start functioning from Oct.1, as planned by the ministry.
“The plan is ambitious, but realistic,” Sedzikowski said. (Reporting by Anna Koper; Writing by Marcin Goettig. Editing by Jane Merriman)