Page 9 - bne magazine September 2020 russia melting

bne September 2020 Companies & Markets I 9 Poland to table restructuring plan
for crippled miner PGG
bne IntelliNews
Poland will present a plan to save the country’s – and Europe’s – largest coal mining company, the state- controlled Polska Grupa Gornicza (PGG), the ministry of state assets said on July 27.
PGG has been struggling in 2020, as lockdown measures, introduced to curb the spread of the coronavirus (COVID-19) pandemic in March-May, reduced demand for electricity. Poland derives nearly 80% of its power from burning hard and lignite coal.
The coronavirus is not PGG’s only problem. The company's output is burdened with high costs and low efficiency of production that make Polish power companies – which are also state- controlled – seek cheaper fuel abroad, for example from Russia.
The EU’s climate policies also make producing power from coal less and less economic. That is pushing Polish utilities to invest in renewables or gas – both reducing demand for coal and putting PGG under more strain.
The company’s revenues have dropped PLN2.7bn (€614.7mn) in 2020 thus far, the ministry said in a statement announcing the meeting, due to take place on July 28, at which it will present a plan for the company. PGG posted an operational profit of PLN86mn last year but writedowns drove that to negative PLN427mn.
“The plan ... is real, [it] guarantees functioning of [PGG’s] profitable units over a longer time horizon and ensures the economic rationality of the company's operations,” the ministry said.
The ministry said that the plan would involve “restructuring” as well as a temporary pay cut. “The company also wants to renegotiate supplier contracts, reduce investment and cut costs related to purchasing of materials, energy and external services,” the ministry’s statement read.
Polish media reported that the details of the plan include shutting down three unprofitable parts of the Ruda mine
as well shutting down the Wujek mine completely. The ministry is also reportedly planning to ask miners to agree to a temporary 30% reduction in pay and a three-year freeze of bonus pay. The media also speculated that the government would propose to shut down all coal mines in Upper Silesia – Poland’s chief coal mining region – by 2036.
The plan will be discussed at a meeting of the ministry, PGG’s executives, and the company’s unions in Katowice, Upper Silesia’s main city where PGG’s headquarters are located.
Unions are unlikely to agree to the plan easily and some unionists have already told local media that it would send “ripples of fury” throughout the Katowice region.
Poland plans to reduce the share of coal in the country’s energy mix from the current 80% to around 60% by 2030 and then to around 50% in 2040. That would bring the country’s climate- harming emissions of carbon dioxide down significantly, although not fast enough, climate organisations say.
Because of the key role coal plays in energy generation in Poland, the country is the only member state opposed to the EU's ambition to make the bloc carbon-neutral by 2050.
We have launched a new publication bneTech
A FREE newsletter covering technology, blockchain, ICOs, TMT and all aspects of the "new economy" in Emerging Europe, Central Asia and MENA.
Click the button to read the latest issue
SIGN UP HERE
bne:Tech
Contents
Top stories
Russia’s top retail and tech companies join forces to hunt for innovations in the rest of the world 2 Ukraine-born startups raised more
than half a billion dollars in 2019 4 Russian video streaming platforms
gain speed 5 Cloud services take off in Russia 6 SEMrush to SEO success 8
Leaders 9
Russia’s internet giant Yandex
announces growing and more
diversified revenues in 2019 10 Russian telecom major Rostelecom misses on earnings in 4Q19, cash
flow solid 12
Investment 13
World Bank approves $35mn project
to modernise Kyrgyz tax administration and statistical system 13 Romanian online home decoration
retailer raises €3.5mn in bonds 14 Russian billionaires Abramovich, Gutseriev, said to invest in Telegram
crypto project TON 14 Russian fund Da Vinci Capital gets
€30mn from Germany’s DEG to invest
in Ukraine, Belarus and Kazakhstan 15
Fintech & E-commerce 16
Russian e-commerce major
Wildberries to add self-employed
vendor products to offering 16 Russian Dixy retailer to launch online sales with Ozon 17 Valuation of Sistema’s e-commerce
asset Ozon boosted to $1.8bn 17
Telecom 19
Makedonski Telekom’s net profit
up 6% y/y in 2019 19 Romanian telco Digi grows by double
digit rates in 2019 19 Russia could postpone 5G rollout
from 2022 to 2024 20
NIBs 21
March 2020
www.intellinews.com
@bneintellinews
Russia’s top retail and tech companies
join forces to hunt for innovations in
the rest of the world
BAs Russia’s retail and tech sectors consolidate, the leading companies are turned their gaze outwards to hunt for
bne:Tech
new technology and innovation.
See page 2
Ukraine-born startups raised more
than half a billion dollars in 2019
In 2019, the venture capital and private equity funding volume for Ukrainian and Ukrainian-founded tech startups reached $544mn (up from $323mn in 2018 and $265mn in 2017), says AVentures Capital’s latest industry report ”DealBook of Ukraine”,
reports Adrien Henni of Ukraine Digital News. See page 4
www.bne.eu