Zaklady Chemiczne Police gets tighter loan provision conditions

01 July 2009 15:39  [Source: ICIS news]

PRAGUE (ICIS news)--A bank has tightened conditions for the provision of a loan to crisis-hit Zaklady Chemiczne Police (ZChP), Poland's second-largest fertilizer producer said on Wednesday.

Polish bank PKO BP now wants ZChP to hire an independent auditor to ensure its restructuring plan meets conditions for the loan worth zloty (Zl) 190m ($59.9m, €42.6m), confirmed ZChP spokesman Rafal Kuzmiczonek.

“It is now going to take several weeks more to secure the loan…it does mean negotiations for raw materials are going to be more difficult, it is always better to have the money already in place,” said Kuzmiczonek.

Wood & Co investment bank analyst Barbara Zaleska said: “This is negative news for ZChP. The company is not breaking even at the [operating profit] line and new financing is badly needed to purchase new raw materials at lower prices and bring back the profitability.”

The entire ZChP board of directors, including CEO Ryszard Siwiec, has resigned in recent weeks as the company's liquidity issues have worsened.

ZChP is also a producer of titanium dioxide (TiO2).

($1 = Zl3.17/€1 = Zl4.46)

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By: Will Conroy
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