Grzegorz Kowalczyk, journalist of Business Insider Polska: How powerful is the Polimery Police installation?
Paweł Bielski, vice-president of Grupa Azoty: The installation is stopped, and the stoppage is due to technical problems for which the installation contractor is responsible. This is not a finished investment. Integrity tests, which are crucial from the point of view of the operational operation of the installation, are missing. Completing the whole thing will cost hundreds of millions of zlotys. Launching requires completion of work, renovation and purchase of raw materials, not to mention employee costs. We cannot afford it in the current situation. Orlen is a real entity that can take over and launch this project today. Funds are needed to complete construction, for renovation, and then for working capital. Without it, the factory will not start.
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The rest of the article below the video:
The investment has not even been completed and renovation is already necessary?
The quality of workmanship has an impact – the way the installation was built had an impact on commissioning, technical support and subsequent operation. Some of the faults come from the so-called childhood period of the installation – were not eliminated before full commissioning.
Hyundai – as the main contractor – screwed up?
This is an issue that will be the subject of arbitration proceedings. But there are some serious topics about which one may have fundamental reservations. I can only say that we seriously question certain decisions and solutions. And this is also one of the reasons why we are in arbitration today.
These are the key elements of the installation, design and implementation errors?
I would not like to go into technical details, because this is a matter of arbitration, i.e. an ongoing legal and business dispute. Generally, we are talking about elements that – according to the contract – the contractor should provide: support, certain technological solutions, quality and achieving specific work results. Hyundai failed to achieve this, and the reasons for this will be the subject of arbitration proceedings.
At what stage is the dispute today? You have only partially settled and the rest is subject to arbitration?
This is what it looks like. This is also a consequence of previous actions on our part – including: that we activated the guarantee due to significant delays of the contractor. There is a certain analogy here to the behavior of the other side. We terminated the contract. Could Hyundai also have terminated it? He couldn't because the contract had already been terminated by us. But in order to change his legal position and the way he presented himself in the dispute, he also declared that he was terminating the contract.
When will Orlen actually take over Polimery?
We assume that this transaction will be closed in the first half of the year. Such a time horizon is included in current documents and reports.
Police polymers
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Grupa Azoty
What is happening around the project today?
At GA Polyolefins, the company implementing the Polimery Police project, at the end of November last year we have started restructuring proceedings in the form of proceedings for the approval of an arrangement. From this point on, all activities must take place in a specific sequence, because we have specific deadlines. Now everything is happening in order: the creditors have submitted their claims, an analysis is taking place, and then arrangement proposals will be formulated and the arrangement will be voted on.
Orlen formally calls on you to repay your debts.
Yes, but he is not calling on Grupa Azoty as a whole, but on a specific company, i.e. GA Polyolefins. This is due to the fact that this company is undergoing restructuring. Formal placing the company's liabilities due and payable is a standard action of a creditor in restructuring proceedings. This is really nothing extraordinary or spectacular – it does not result from any specific situation of the Azoty Group, but from the legal status and mechanics of the restructuring proceedings.
Did Orlen surprise you?
This was to be expected. Maybe we weren't waiting for it with bated breath, because we have a lot of other topics to deal with, but if you analyze what such proceedings look like and how creditors work in restructuring, it is no surprise.
The offer has been made, but you are negotiating terms and bonuses. At what stage are these talks?
These negotiations are ongoing and, like all negotiations, they are quite complicated. The offer itself is public, the amount is known and I can talk about it.
This amount – let's be honest – is not high. PLN 1.022 billion for an investment costing over PLN 7 billion.
This is the market situation today. If we look at what has happened on the market in recent months, this is not a surprising situation.
Former president of Grupa Azoty, Tomasz Hinc, even talked about valuations of PLN 12 billion. These values differ significantly from the amount we are talking about today.
There were such estimates from the former president. Rather, they concern the current market costs of constructing this type of new plant. But who, in the current market situation on the plastics market, would spend such an amount on an uncertain business? The key questions in our current situation are: what is more important – how much such an installation would cost today, how much we spent on this project, or how much these assets are worth in the market today? These are completely different things.
Interviewed by Grzegorz Kowalczyk, journalist of Business Insider Polska
