Poland

Poland's fourth biggest power group Energa said on Thursday it was not interested in buying assets or shares in state-run coal miner JSW as part of a rescue plan, Reuters reported. Poland's energy minister said on Wednesday that JSW, EU's biggest coking coal producer, may need a share issue as it needs more money than estimated last year. This has sent JSW shares 13 percent down on Wednesday and a further four percent on Thursday. Analysts also said that the comments have weighed on Energa's share price on fears that it will have to continue to help rescue state-controlled coal mining firms.

Poland risks breaching EU fiscal deficit rules in 2017 as the new populist government steps up public spending to pay for childcare handouts and promised tax cuts, the OECD has warned, the Financial Times reported. The EU’s sixth-largest economy is forecast to break rules mandating a fiscal deficit below 3 per cent of gross domestic product next year unless it backs down on the spending promises or finds a way to increase tax revenues rapidly.

Poland's prime minister has dismissed Deputy Finance Minister Konrad Raczkowski, the finance ministry said on Wednesday, over his comments that a few small lenders were destined to fail, Reuters reported. "We can confirm that Raczkowski has been dismissed by the prime minister," the ministry's press office said. Earlier this month, Raczkowski said that a few small Polish lenders were "toxic" and would go bankrupt later this year. In response, the financial regulator KNF said the banking sector was stable and effective.

Several small Polish lenders will fail this year, but their bankruptcies will not hurt Poland's financial system, deputy Finance Minister Konrad Raczkowski said. "Several banks are 'toxic' and they will fail this year still. They are small lenders, let me reassure you right away, and it will not disturb the Polish financial system," Raczkowski was quoted as saying by state agency PAP on Thursday. The failures will not be caused by Poland's new bank asset tax, Raczkowski said, but will be a result of mismanagement and poor institutional supervision.

Poland’s ruling party softened a tax on its financial industry which could have hurt its ability to finance the budget deficit, helping to rally government bonds today, Bloomberg News reported. Parliament’s public finance committee excluded banks’ roughly $41 billion in government- bond holdings from taxable assets “to prevent an increase in budget-financing costs,” Law & Justice lawmaker Wieslaw Janczyk, a deputy head of the committee.

The Polish president's economic advisor Zdzislaw Sokal told Reuters that the failure of SK bank which cost other lenders some 1.4 billion zlotys ($348.17 million) would not inflict any damage on the domestic banking sector. Sokal added that President Andrzej Duda was not ready yet to announce specific plans for legislation mandating a conversion of Swiss franc mortgages, one of his pre-election promises. Duda was elected in May. It was not clear yet, Sokal said, whether the conversion would be conducted at historical exchange rates, as this may be subject to discussion.

Coking coal producer JSW expects to reach an agreement with bondholders on a debt restructuring, the company's deputy head said on Friday, three days ahead of a deadline in the negotiations. State-controlled JSW is struggling to cope with record low coal prices and high mining costs and has had to cut costs. "Taking into account the talks up to now, both sides aim at an agreement and we assume that the agreement will be reached," Tomasz Gawlik told reporters at a news conference on the company's third-quarter results. He declined to give further details.

Poland's second-biggest power firm Tauron said on Thursday it has submitted an offer to buy assets owned by the troubled state-run Brzeszcze mine, Reuters reported. The already highly-indebted Tauron said it submitted the offer through a special purpose vehicle (SPV) in which it will ultimately hold a 40-percent stake. The rest of the SPV will be controlled by two other state-run entities. SRK, a state-owned coal mines restructuring company and the current Brzeszcze owner, has announced a public tender to sell the mine, meeting one of the conditions set by Tauron for it to submit an offer.

Poland's treasury ministry wants to transfer part of its stakes in gas group PGNiG, insurer PZU and utility PGE into state-run investment fund TF Silesia, an official agenda for a cabinet meeting on Monday showed. A treasury spokesman declined to comment on the reason for such a move. Local media, however, said the government wants to use TF Silesia, among other state entities, to rescue state-controlled Kompania Weglowa, the European Union's largest coal miner, which is on the brink of bankruptcy due to high costs and falling coal prices.

Poland is again trying to persuade power firms to take direct stakes in troubled coal company Kompania Weglowa as launching a fund to help the miner would take too long, Rzeczpospolita daily said on Wednesday. The Polish government is working hard to keep the European Union's biggest coal miner alive as its bankruptcy would leave thousands of potential voters without jobs ahead of a general election in October.