Bidders submit final and binding offers for PHS
Having failed to convince the Polish authorities of the validity of its step by step-gradual investment project, Arcelor decided not to bid for PHS. Meanwhile, LNM Holdings and US Steel have submitted their bids on April 22, 2003. After this stage, the two rival biders will hold formal negotiations with the authorities, expected to last for several weeks. The conditions for the PHS sale are quite detailed. Polish authorities expect the investor to take Zloty 1.6 billion (approx. €375 million) in company debt. The debt is mostly to state owned companies and would be swapped for equity. In addition, the investor would be required to put in $150 million for technical modernisation. LNM's formal and binding offer is reported to meet all basic requirements of the authorities. LNM Chairman Mr. Mittal stated that growing Polish market, the technical expertise and skills of the PHS workforce, the possibility of consolidating the Polish Steel Industry and the impending integration of Poland into the EU are some of the reasons for LNM's investments in PHS. LNM believes its strong balance sheet shall secure the financial future for PHS, its past experience in more than ten similar takeovers would secure future success for the Polish mill. US Steel's formal offer to the Poland Ministry of state Treasury for PHS offers application of its proven management practices, focusing on new capital investment priorities. However, not much detail is disclosed as per the terms of official privatisation process