Polish government negotiates with banks on loans for JSW

The Polish government is negotiating with banks regarding possible loans to help rescue the mining company Jastrzębska Spółka Węglowa (JSW). This was announced by Minister of State Assets Wojciech Balczun, according to Reuters.

«We are talking to banks. The company needs to undergo a restructuring process. It needs to get rid of unnecessary assets that could be a source of financing,» the minister told reporters.

JSW, Europe’s largest coking coal producer, is facing liquidity problems, in particular due to falling raw material prices and high wage costs.

Balczun explained that JSW’s management is finalizing a recovery plan that will include a restructuring roadmap and a simplified financial model to stabilize the company, according to the financial portal Money.pl.

The Ministry of State Assets is also awaiting the results of negotiations between the management of Jastrzębska Spółka Węglowa and the social side.

According to Balczun, one of the requirements for stabilizing the company’s liquidity was an amendment to the Mining Industry Act, and this has been achieved. It still has to go through the legislative process and be signed by the president.

The amendment to the law, which has already been adopted by the government, provides for the extension of protective payments to JSW employees who are being laid off, which are expected to reach PLN 2.9 billion.

“I am cautiously optimistic. We want to save JSW. We know that it is an important company on the Polish economic map, and coking coal is crucial for the development of the steel industry,” the minister stressed.

He also expressed hope that the downturn in the coal market will end someday.

In mid-October, Polish Prime Minister Donald Tusk announced that the government was preparing a restructuring plan for the state-owned company Jastrzębska Spółka Węglowa. Among the steps being discussed as part of the plan are cost optimization, including possible wage cuts, as well as funding for voluntary staff reduction programs. The head of government also did not rule out the possibility that the Polish defense industry could participate in the transformation of the company.