Poland

The Polish government will work to correct “a giant mistake” that is the country’s private pension system, introduced in 1999 and responsible for the bulk of Poland’s public debt, its finance minister said Tuesday, The Wall Street Journal Emerging Europe blog reported. The government in recent years has wrestled with privately managed pension fund companies, which receive a percentage of gross salaries and invest it in the capital market.

A unit of Russia's Alfa Group said on Thursday it had withdrawn its proposal to acquire Central European Distribution Corp, one of the world's largest vodka producers, through a restructuring of CEDC's finances. Alfa Group unit A1 said in a two-sentence statement to Reuters that it had officially withdrawn its non-binding offer to restructure CEDC. It also said the two other members of its consortium, CEDC investor Mark Kaufman and SPI Group, which owns Stolichnaya Vodka, had been informed of its decision.

Central European Distribution Corp , a leading vodka producer that missed a debt payment last week, received a restructuring plan offering $280 million in cash, which would turn the equity over to a group led by a Russian investor, Reuters reported. A1, a unit of Russia's Alfa Group, was also offering investors that hold notes issued by CEDC $650 million in new debt, according to a letter that was sent to the board of CEDC on Thursday.

Central European Distribution Corp , the maker of Russian Standard Vodka, said it has scrapped a bond exchange after a rival company owned by its chairman made its own offer for the same notes, Reuters reported. Roust Trading Ltd, owned by Russian billionaire and CEDC Chairman Roustam Tariko, has offered to buy the CEDC notes that it does not own for $25 million in cash and $30 million in secured notes issued by Roust. Tariko's company owns approximately $102.6 million of the $258 million of the 2013 notes, which matured on March 15 without a payment from CEDC.

Poland's LOT airline said Friday it will present a plan to stave off bankruptcy next month after the government indicated that there will be no more money for the lossmaking state-owned company, the Associated Press reported. Poland's main link to the western world under communism until 1989, LOT has largely struggled since. LOT spokesman Marek Klucinski said the rescue plan will be presented March 20 and will include layoffs among some 2,000 employees and a deep restructuring of the company and its routes. LOT's most profitable routes are to Chicago and New York.

Poland’s government drew a line in the sand ahead of the upcoming European Union’s summit, saying proposed 30 billion euros ($39.9 billion) of additional budget cuts were “inconceivable,” The Wall Street Journal Emerging Europe blog reported. EU leaders will Feb. 7-8 meet to try to agree on the size and structure of the bloc’s budget for 2014-2020 after the failure of their previous attempt in November over the €30 billion of more cuts proposed by Germany.

Polish Prime Minister Donald Tusk turned the screw tighter on his treasury minister Friday by saying the official’s job and place in the cabinet depended on putting the country’s troubled flag-carrier, LOT Polish Airlines, on secure financial footing, The Wall Street Journal Emerging Europe blog reported. Mikolaj Budzanowski, who has been treasury minister since November 2011, is responsible for managing state-controlled businesses and pushing on with a privatization drive to sell hundreds of small companies as well as billion-dollar stakes in larger ones.

Polish builder Polimex is targeting larger-than-planned cost cuts and will have its debt on track by the end of June, its chief executive said today, Reuters reported. Last month, Polimex clinched a debt restructuring deal with creditors and bondholders under which state industrial agency ARP will buy up to a third of the builder. Polimex has said it would sell non-core assets worth at least 600 million zlotys ($195 million) and cut operating costs at least 300 million by the end of 2015.

Poland's government said Wednesday it is considering a bailout for LOT after the struggling national airline requested more than $125 million in aid amid economic turbulence that has already led to the demise of some other European carriers, The Wall Street Journal reported. LOT's plea for help came less than a month after it staged a lavish ceremony to mark delivery of a Boeing BA -0.46% 787 Dreamliner as it became the first airline on the Continent to fly the new jet. The company said economic woes in Poland and the neighboring euro zone had hurt its business.

The main donor and the main recipient of European Union subsidies, Germany and Poland differ on the need to cut the bloc’s budget for 2014-2020, their leaders said Wednesday ahead of an EU summit next week, the Emerging Europe blog reported. The bloc’s 27 members will likely struggle at a summit on Nov. 22-23 to agree on a proposed budget of some €1 trillion ($1.3 trillion). Germany and other states that pay more into the bloc than they receive from it would like to cut their contributions, lowering farm subsidies and funds for the less-affluent members. U.K.