Private placement in Stalexport S.A., a steel-trading and steel-producing holding with headquarters in Katowice, Poland.
The project's objectives are to: (i) further privatisation of a leading Polish heavy industry company; (ii) promote market-driven restructuring in the Polish steel industry; (iii) assist the Polish authorities with an under-invested sector in preparation for EU accession; and (iv) raise shareholder value. The Bank's investment will support the strategic repositioning of the company and the modernisation of the company's subsidiary steelworks.
The project will demonstrate that it is possible to mobilise private sector financing to undertake market-driven restructuring of the Polish steel sector, thus reducing the need for state aid in the lead-up to accession to the EU. The recapitalisation of the company, jointly with complementary domestic bank financing, will allow the management to privatise, restructure, and modernise Huta Ostrowiec as well as a limited number of smaller Polish steelworks. It will also allow the company to finance required environmental investments in selected steelworks consistent with the implementation of "acquis communautaire", as well as a Management Information System and enhanced controlling and treasury functions.
Stalexport S.A. is Poland's leading steel import-export and processing company; it is one of five former foreign trade companies (FTCs) listed on the Warsaw Stock Exchange, where it is one of the top 20 companies according to market capitalisation. In 1996 the company's consolidated sales totalled PLN 1.86 billion (US$ 648 million), generating after-tax profit of PLN 26 million (US$ 9 million). Unconsolidated net assets at the end of September 1997 were PLN 342 million (US$ 101 million).
Private placement of PLN 105.8 million (ECU 27.5 million) to acquire 4 million shares (31.2 per cent of the company's share capital).
Total capital expenditure of PLN 600 million (ECU 158 million).
A summary environmental analysis of this project is annexed to this document.
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