Reuters: Bankruptcy News: Poland's Polimex, fresh from rescue deal, eyes profit in 2014

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Poland's Polimex, fresh from rescue deal, eyes profit in 2014 Jan 7th 2013, 15:21 WARSAW | Mon Jan 7, 2013 10:21am EST WARSAW Jan 7 (Reuters) - Polish builder Polimex aims to return to net profit in 2014 on the back of a restructuring plan placing energy and railway projects at the heart of its recovery, its chief executive said on Monday. "We still have two years of hard work ahead of us," Chief Executive Robert Oppenheim told reporters. "One should not expect great financial results from us this year. We are aiming for a net margin of 3.0-3.5 percent in 2014." Polimex managed to clinch a debt restructuring deal with creditors last month after running into trouble along with many other Polish construction firms when a road-building bonanza ground to a halt along with the nation's economy, leaving many saddled with loss-making contracts and huge debts. State industrial agency ARP agreed to buy up to a third of Polimex, while state-controlled lender PKO BP became a key warrantor for the former blue-chip. As a result of the restructuring, energy and railway contracts are now key for Polimex, which is part of consortiums in Poland's two largest energy deals: for two 900-megawatt coal-fuelled units in Opole, and a 1,075 megawatt coal-fired unit in Kozienice The company is also eyeing further asset spin offs and cost cuts. It plans to hold a rights issue in the second quarter, cut staff by a fifth year-on-year by the end of June, sell non-core assets worth at least 600 million and cut operating costs at least 300 million by the end of 2015. As part of the rescue deal agreed in December ARP and ING OFE pension fund will this month buy new shares worth a joint 200 million zlotys ($63.3 million) while creditors have agreed to swap 250 million worth of debt into shares. "This is just the start of the road," Oppenheim said. "I told my employees that the restructuring deal was like passing through the Red Sea. But now we have to cross the desert. This is going to be a very bad year in construction in general." "We are not aiming to be a company of huge revenues. We'll be mainly fighting for profitability, with the greatest focus on achieving positive operating cash flows." ($1 = 3.1586 Polish zlotys) (Reporting by Adrian Krajewski; Editing by Sophie Walker) Link this Share this Digg this Email Reprints

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