PKP Cargo has presented a new restructuring plan that aims to fully repay its debts by the end of 2027, instead of the previously proposed 2036. The plan involves partial cash payments, debt-to-equity conversion, and a new share issue to raise funds. If successful, the Polish rail freight operator would exit restructuring within 18 months.
The proposal, announced in late May, divides creditors into several groups. Small creditors with claims under 50,000 zloty would be paid in full. Those with claims between 50,000 and 600,000 zloty would receive 50% in cash. Public creditors, including tax offices, would get 75%. The largest group – financial creditors – would see a 50% reduction of their claims, with the remaining half settled by 25% in cash and 25% in shares at 12 zloty per share.
Why accelerate the repayment schedule?
Under the original terms from June 2025, the bulk of repayment was due only in 2036. That meant the company would remain under restructuring for a decade, limiting its ability to seek new financing, apply for EU funds, or bid for strategic contracts.
– If we had left the earlier proposals, the main repayment would have been pushed to 2036. This would have meant the company stayed under the restructuring plan for ten years, so from the market’s perspective it would not have been seen as a fully stable and reliable participant – said Paweł Miłek, vice-president for restructuring at PKP Cargo.
He stressed that faster settlement benefits creditors as well. Cash received today – even at 50% of the claim – has much higher real value than a balloon payment a decade later. The company also aims to resume dividend payments after completing the restructuring, something that was impossible under the long-term plan.
New shares and dilution concerns
To finance the plan, PKP Cargo wants to issue two series of shares. Series M – 89.5 million shares at 1 zloty each – would be reserved for majority shareholder PKP SA and employees. Series N – 55 to 90 million shares at 12 zloty each – would be offered to existing shareholders with pre-emptive rights. The total number of shares could rise from 45 million to over 200 million, raising fears of heavy dilution among minority investors.
– Let’s weigh it up. On one side we have a company with relatively low valuation, about 3 billion zloty in debts, no ability to take on new financing, and no funds for modernisation or growth. On the other side we have a company that – even with more shares in circulation – will be debt-free, able to access debt and EU programmes, and can execute strategic state orders – Miłek said, defending the plan.
The vice-president added that creditors receiving shares would be subject to a two-year lock-up to prevent a sudden sell-off. He also expects the stock price to rise once the debt burden is removed and the company begins to grow, potentially making the 12-zloty issue price look attractive in hindsight.
– After the debt repayment and stabilisation, the company could also return to paying dividends – he noted.
The restructuring plan still requires approval by a majority of creditors (by number and by value) and a green light from the commercial court. Voting is expected to start in the third quarter of 2026.
Źródło: WNP.PL, Fot. materiały prasowe PKP Cargo / Shutterstock
