The chairmen of the two companies Krzysztof Jałosiński and Jerzy Marciniak talk about the plans regarding business combination and the consequences.

“We can and we want to establish a big capital group capable of competing with the biggest European players in the chemical industry”, explains Jerzy Marciniak, Chairman of the Management Board of the Azoty Tarnów Capital Group.

In order to achieve that, on June 15th, the nitrogen producer Zakłady Azotowe in Tarnów – Mościce announced a call for subscription for 49.5 million shares constituting 66% of the shares in the chemical plant Zakłady Chemiczne Police, at PLN 11.50 per share.  The minimum number of acquisition of shares in Police required for a successful combination 38.25 million.

The Chairman of Z.Ch. Police is positive about that solution.
“Thanks to the merger, we shall be able to neutralise possible fluctuations on the market and we will not be exposed to the results of the crisis”, emphasises Krzysztof Jałosiński.  “A strong business partner will ensure our financial security, trustworthiness in negotiations with banks and confidence of our future actions.

If the transaction comes off, the plant in Police will retain its legal independence and will remain a listed company.  The chairmen are not anticipating reduction in employment, although they cannot rule out increasing the equity of Z.Ch. Police.
“We are in the process of implementation of our corrective action plan; however, after the possible consolidation some issues will still need adjusting so that we can follow our joint policy as a capital group”, Mr. Jałosiński said.

It has been stressed that after the merger, the companies will be able to use many synergies such as for example continuation of the joint initiative of ammonia production.  Furthermore, they will be able to increase the scale of their operations and the portfolio of the product offering.  They also anticipate improvement in the effectiveness and conditions of supply of raw materials, including the key one – natural gas.

Last year, Azoty Tarnów completed a similar takeover of the nitrogen producer Zakłady Azotowe in Kędzierzyn-Koźle.  After the addition of the Police company, the combined revenue of the new capital group will exceed six billion zlotys.

By August 16th, the shareholders of the Police company, i.e. mainly the State Treasury, have to make a decision regarding the possible sale of shares.  Also by that time, the Office of Competition and Consumer Protection (UOKiK) will be able to express its opinion about the anticipated merger.  Mr. Marciniak says he is positive about the final resolution.

The Ministry of the State Treasury, the majority shareholder of Police, has informed in an announcement that it will reply to the call for subscription for shares.

“Following an analysis of the price offered in the call and in consideration of some other aspects, including the internal situation in each of the two companies, assessment of the market and the synergies increasing the value and improving competitiveness of the newly-established capital group, the Ministry of the State Treasury will offer to sell 44,556,840 shares in Z.Ch. Police S.A., belonging to the State Treasury, constituting 59.41% of the share capital of that company”, we can read in the announcement.

The transaction will most likely be completed in mid August.

KZ