Reuters: Bankruptcy News: UPDATE 1-Poland's Polimex to sign key power deal-source

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UPDATE 1-Poland's Polimex to sign key power deal-source Sep 21st 2012, 08:47 Fri Sep 21, 2012 4:47am EDT * Polimex to sign crucial $2 bln power deal later on Friday * Secured guarantees for the deal to build power block for Enea * Shares jump as much as 9 pct (Wraps Polimex stories, adds share reaction and analyst comment) By Maciej Onoszko and Adrian Krajewski WARSAW, Sept 21 (Reuters) - Debt-saddled Polish builder Polimex is set to sign a 6.3 billion zloty ($2 billion) construction contract, a source said, in a deal which analysts say is crucial to its survival. Polimex on Friday won more time to secure bank guarantees it needed for the construction of a 900-1000 megawatt coal-fired power unit in Kozienice for utility Enea. "The signing will take place today. Polimex secured the guarantees," a source close to the state-controlled energy group told Reuters on Friday. Polimex said its creditors had agreed to give it until Sept. 30 to secure financial backup for the contract, which it will run with Japan's Hitachi. Shares in Polimex, which racked up huge debt after Poland's road building frenzy left the construction sector with loss-making contracts, jumped by almost 9 percent. The deal is crucial for Polimex, the largest of dozens of Polish builders that ran into trouble in recent months after the motorway bonanza turned sour. "It seems that Polimex will be saved," said Trigon analyst Michal Sztabler said. "It is a good sign in the context of the company's restructuring." Polimex creditors have already agreed to waive interest payments for four months to give the company time to restructure its 2.5 billion zloty debt. Fearing another collapse following the bankruptcy of rival PBG, the Polish government, through its industrial development agency ARP, agreed to buy as much as a third of Polimex. Polimex is part of consortiums picked to build two of Poland's most advanced projects to expand power generation and several stretches of motorways. Its collapse could hurt dozens of sub-contractors and affect thousands of people employed in the construction industry, just as Poland's economy begins to show signs of a slowdown. ($1 = 3.2040 Polish zlotys) (Editing by David Cowell) Link this Share this Digg this Email Reprints

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