Reuters: Bankruptcy News: UPDATE 1-Polimex gets lifeline loan from Polish state agency

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UPDATE 1-Polimex gets lifeline loan from Polish state agency Sep 6th 2012, 14:31 Thu Sep 6, 2012 10:31am EDT * Agency ARP approves PLN 45 mln loan for troubled builder * Polimex CEO says loan just first tranche of larger aid * Shares surge as much as 9 pct (Adds analyst and treasury comment, updates shares) WARSAW, Sept 6 (Reuters) - Troubled Polish builder Polimex won a lifeline loan from state-owned development agency ARP, lifting the company's shares on Thursday. Polimex is the largest of dozens of Polish construction companies facing financial trouble after bidding for cut-price contracts to build roads for the Euro 2012 soccer championship Poland co-hosted with Ukraine. The contracts gave them razor-thin margins, which were eaten up by the rising cost of materials. As a result Polimex's rival PBG sought bankruptcy protection earlier this summer, also asking ARP for help. The state agency said it would lend Polimex 45 million zlotys ($13.6 million), less than a third of the total aid the builder planned to ask of the state agency. "It's very good news. This is only the first tranche," Polimex Chief Executive Robert Oppenheim told Reuters. In an interview for Reuters last month, the CEO said Polimex would seek a total of 160 million zlotys in loans from ARP, with media speculating it might use its units Energomontaz Polnoc and Sefako as collateral. Any state aid would likely attract the attention of EU regulators who police violations of competition rules, but the Treasury Ministry, which oversees ARP and other state assets, said the loan was extended on commercial grounds. "This is a loan absolutely based on market conditions," Deputy Treasury Minister Rafal Baniak told TVN CNBC channel. "The interest on the loan is close to what commercial banks are offering on average," he added, without going into details. Shares in Polimex, which have lost almost 70 percent in the year to date, jumped more than 9 percent on the news, capping the rise to under 6 percent at 1356 GMT. "It allows it to continue operations," DM BZ WBK analyst Adrian Kyrcz said. "It's positive news, but this does not change the fundamental view. We have to wait for the decision of its bondholders and owners on whether they want to save the company or not." Polimex fired Chief Executive Konrad Jaskola on Aug. 10, after creditors agreed to waive interest payments for four months to give the company time to restructure its 2.5 billion zloty debt. His replacement, Oppenheim, who joined from Austrian builder Strabag, said his priorities were agreeing a debt deal with banks and bondholders and finding new investors to buy a stake. ($1 = 3.3194 Polish zlotys) (Reporting by Adrian Krajewski; Editing by Helen Massy-Beresford) Link this Share this Digg this Email Reprints

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