PBG Builder Advances as Court Allows Bankruptcy: Warsaw Mover
PBG SA (PBG), Poland’s third-largest construction company, extended its gains after a Polish court gave it the go-ahead for bankruptcy yesterday, which included an arrangement with creditors.
The shares jumped as much as 6.2 percent, and traded 4.9 percent stronger to 7.25 zloty as of 12:17 a.m. local time, rising for the fourth day. The builder has slumped 90 percent this year, underperforming the WIG20 Index, which rose 2.8 percent.
A Poznan, western Poland-based court agreed to declare bankruptcy of PBG which will include an arrangement with its creditors, a spokeswoman for the court, Joanna Ciesielska- Borowiec, said by phone yesterday. The company filed for bankruptcy after talks with banks remained at an “impasse,” preventing the company from the fulfilling its contracts, the company said in a statement on June 4.
“PBG now has a few extra months left to obtain new financing ,‘‘ Piotr Nawrocki, a Warsaw-based analyst at Wood & Co. Financial Services AS wrote in a research note to clients today. ‘‘However, the company’s main problems, in the long run, are not going to be solved by the court’s decision as it still cannot finance its working capital to finish its current projects.’’
The builder, which specialized in oil and gas engineering, ventured out of its core business to bid on arena and highway construction deals after Poland was selected to co-host the Euro 2012 soccer championship, only to see its debt swell on falling margins.
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