Polimex: Reaches agreement with creditors

The company has signed an agreement with its creditors regarding the temporary suspension of execution of debts for the period of four months.

Within this period, Polimex will negotiate the ultimate agreement changing its financing structures. According to vice-president of the company Robert Bednarski, Polimex's current cash flow does not allow to lower its debt this year. However, fellow management board member Grzegorz Szkopek said that the estimated savings due to the planned restructuring should amount to PLN 184m by the end of 2013. The agreement to be valid must be signed next week by other four banks: BPH, DZ Bank, Caixa and RBS.

Our view:
If the other four banks enter the agreement and the standstill agreement is not terminated it would help the company to stabilize the short term liquidity situation. It would also mean that the company would be most likely able to continue the pending contracts which require massive amount of working capital. Still, we expect Polimex to present the real status of road contracts around publications of results for the 2Q12.