Two bidders to compete for Polish PHS mills
It appears that, with
Poland having obtained the right to join the European Union in 2004, privatisation of the Polish state owned conglomerate Polsky Huty Stali (PHS)has become the oject of a bidding war between the Pittsburgh based United States Steel Corporation (
US Steel) and the continously growing group LNM Holdings based in London.
PHS has 7 billion zlotys annual revenue which is equal to around $1.8 billion, accounts for the 70% of the Polish steel industry gathering four mills Huta Sendzimira, Huta Katowice, Huta Cedlera and Huta Florian of
Poland. The Government is expected to announce terms for the 51% stakes of PHS soon. Currently, interested buyers are visiting the mills to evaluate the fair value.
Previously interested parties Arcelor and ThyssenKrupp have canceled their plans to make bids for PHS takeover, however both
US Steel and LNM Holdings seem to be equally willing to acquire the Polish mills.
Poland's commitment to reduce its annual capacity of finished steel
production by 690'000tons for the sake of EU accession is not thought to have any effect on the sale of PHS. Western European producers, seeking low-cost places to produce steel either for Eastern
Europe's own growing markets or for exportsto Western European countries at the time of these seven formerly communist countries' joining the EU in the year 2004. The EU accession is expected to boost the Polish economy and therefore the forecasts point out to a growth of steel market in the nation.
The only handicap of investing in the Polish steel mills appears to be the weak state of economy in the country as a renovation is required at the first stage. But still, despite the ongoing economic plight in the last three years with declining new auto sales by 49%, shipyard revenues by 12% within the period of 1999-2001, recovery is expected in 2003.