Mr. Krochmal, the former Lower Silesian governor, is considered by the State Treasury ministry as the replacement for of (100 PLN, -1,67%) current CEO Mr. Skora, according to unofficial leaks reported in today’s “Parkiet” daily. The newspaper also mentions Mr. Bugajski, and Mr. Gieralt, the two former managers, as alternative candidates.
Our view: We expect a rather negative market reaction on the back of the news today. The nominations seem to be driven by political and not professional considerations. The news conflicts with earlier indications from State Treasury, that they would seek professional and experienced candidates to run state owned enterprises. Neither of the candidates mentioned by the newspaper seems to have any kind of international background and necessary credentials to improve KGHM’s efficiency of the existing operations, speed up investment in the mining and smelting equipment, complete new copper deposit acquisitions, etc.