Poland's Ciech may struggle with first international bond issue - bank

02 November 2012 15:59  [Source: ICIS news]

LONDON (ICIS)--The first international bond of Poland's Ciech, currently in premarketing and important to the restructuring of the chemical group, could face difficulties in tough markets, Raiffeisen Centrobank said on Friday.

Ciech wants to obtain sums of up to zlotych (Zl) 500m ($157.2m, €121.4m) and €300m ($389.6m, Zl 1.2bn) from the bond issue, with one tranche denominated in euro as a natural hedging since the majority of the company's revenues are paid over in foreign currencies, chiefly euro.

However, the overall target — which amounts to Zl 1.7bn or €421.4m — is likely to be missed, according to the forecast of Raiffeisen Centrobank analyst Dominik Niszcz.

“I believe that in total they may raise Zl 500 to Zl 1bn, but rather closer to Zl 500m,” he said.

“They started the roadshow for the bond in October but the local market is tough at the moment, especially with a couple of firms having gone bankrupt, such as Polish construction firm PBG that was responsible for the national football stadium for the Euro 2012 football championships,” he added.

Proceeds from the bond are intended for paying down part of a Zl 1bn bank loan and to meet financial demands from maturing bonds of Zl 300m issued in December 2007 for the acquisition of a soda ash plant in Germany, Ciech said.

Ciech in October received backing from analysts at banks including Raiffeisen Centrobank and WOOD & Company after reaching a deal with German chemicals giant BASF, which will see it close its financially pressured Zachem toluene di-isocyanate (TDI) business.

Unions at the company, however, have mounted protests against that move and Ciech's wider divestment strategy, warning that it will cost hundreds of jobs.

($1 =  €0.77)
($1 = Zl 3.18, €1 = Zl 4.12)

By: Will Conroy
+44 20 8652 3214

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