Reuters: Bankruptcy News: UPDATE 1-Polish court delays decision on $3.7 bln PGE investment

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UPDATE 1-Polish court delays decision on $3.7 bln PGE investment Sep 18th 2012, 09:27 Tue Sep 18, 2012 5:27am EDT * Court delays decision on new Opole power units until Oct. 2 * Investment will offer stimulus for slowing economy * Construction firms keenly await green light for project (Adds judge comments, market reaction) By Maciej Onoszko WARSAW, Sept 18 (Reuters) - A Polish court on Tuesday delayed until Oct. 2 a ruling on whether to allow an 11.6-billion zloty ($3.7 billion) investment in new power units by Poland's top utility PGE, a decision keenly awaited by troubled local builders. The utility has said that more delays in starting the project, the largest in the country's power sector, could hurt Polish construction firms, which are in financial difficulties, and deprive the slowing economy of an important cash stimulus. "Because of the complexity of the case, the court decided to delay its verdict until October 2," judge Jerzy Stelmasiak told the hearing. Earlier this year PGE had to delay its investment in the project, for the construction of two 900-megawatt coal-fired units in the south-western city of Opole, after a court blocked an environmental clearance for construction. If the higher court upholds that ruling when it reaches a decision on Oct. 2, PGE will have to re-launch its application, delaying the investment further. Poland's beleaguered construction sector is following the case closely as many major builders - strapped for cash after cut-throat bidding for road deals pushed them to the brink of insolvency - are involved in the project. The consortium to build Opole includes Polimex, Rafako, a unit of PBG, and Mostostal Warszawa , which is the Polish unit of Spanish firm Acciona . PBG has been in bankruptcy protection since June, while Polimex has until Nov. 24 to come up with an austerity plan after its creditors agreed to waive interest on the group's 2.5 billion zloty debt pile in July. Following the court announcement, PBG's share price retreated from its earlier gains of 3.7 percent to rise 0.5 percent. Polimex, which earlier on Tuesday had jumped 9.3 percent, fell back to a gain of 3.7 percent. ($1 = 3.1237 Polish zlotys) (Reporting by Maciej Onoszko; Writing by Adrian Krajewski; Editing by Mark Potter) Link this Share this Digg this Email Reprints

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