Rafako files for bankruptcy. The president translates

Representatives of the Rafako management board recalled at the conference on Thursday that an application to declare the company bankrupt had been submitted to the District Court in Gliwice. According to the company's president, Maciej Stańczuk, the final reason for this decision were the actions of JSW Koks, which decided to terminate the two-year-long mediation before the General Prosecutor's Office regarding the construction of a heat and power plant in Radlin.

– JSW Koks collected PLN 20 million from the guarantee deposit paid by Rafako and demanded payment of the guarantee in the amount of PLN 35 million. The guarantee was a security for the construction of a heat and power plant in Radlin. The bank that provided the guarantee paid out these funds at the beginning of the week, he said.

As Stańczuk pointed out, it was a “hostile step” on the part of JSW Koks, depriving Rafako of the basic source of revenue that the company still had and preventing it from conducting restructuring negotiations with creditors. – As a result, due to the loss of financial liquidity, it became impossible to implement the Rafako management plan, which was to reduce the company's debt so that it would be possible to acquire a strategic investor and, as a result, return to the market – he noted.

The president of Rafako emphasized that the decision of JSW Koks is even more incomprehensible because it is unfavorable for itself in the long run. – JSW Koks has generated enormous problems for itself. We were close to completing the project, which was Rafako's responsibility. the remaining synchronization of the block with the network, which was to take place by mid-November, he noted.

In Stańczuk's opinion, JSW Koks will improve its liquidity situation only “for a while” at the expense of Rafako. – The project, which had a chance to be completed in less than two months, in the current situation will be significantly delayed – even by 2-3 years, with all the negative consequences for the residents of Radlin, who were supposed to be provided with heat – he added.

Stańczuk reminded that the coke-oven gas-fired heat and power plant built by Rafako is to replace the “Marcel” heating plant built in 1908, which does not meet modern standards and must be shut down by 2025. – We do not understand how the main contractor can be thrown out when the project's involvement is at the level of 99 percent – he emphasized. According to the president of Rafako, it will be very difficult for the recipient to obtain certification of the new unit without the participation of the main producer.

Rafako's vice-president Cezary Klimont, who was present at the conference, pointed out that the contract with JSW Koks was not indexed during implementation, despite the increase in material costs and changes in the project itself.

– When the contract for the construction of a heat and power plant in Radlin was signed 5 years ago, the investment was worth approximately PLN 250 million. Over the following years, JSW Koks changed the scope of the project, expanding it, and the amount increased to PLN 500 million. This project is not the sale of a standard boiler, but a tailor-made power plant and significantly modified in accordance with the recipient's needs – emphasized Klimont.

In Klimont's opinion, Rafako's loss of liquidity also causes the company to lose its credibility and thus to be unable to obtain a portfolio of new orders that would enable it to satisfy its creditors.

Before midnight on Wednesday, the management board of Rafako announced in a stock exchange announcement that it had decided to immediately file for bankruptcy of the company due to the loss of the company's ability to perform its obligations as they fall due.

“The Management Board of the Issuer (Rafako – ed.) made a decision, in the form of a resolution of the Management Board, to immediately submit an application to declare the Issuer's bankruptcy due to the loss of the Issuer's ability to perform the Issuer's due obligations, which (…) is of a permanent nature and therefore means that the bankruptcy condition has been met (…),” the company said.

In her opinion, adopting a resolution to submit an application is currently the only solution that can best protect the interests of both Rafako and its creditors, shareholders and employees.

The company indicated that one of the reasons for such a decision is the inability to “agree with the Issuer's key creditors on detailed rules for the conversion of the Issuer's liabilities towards such creditors into shares in the increased share capital of the Issuer or an alternative scenario of further restructuring of the Issuer's liabilities towards its key creditors”, which would allow for reductions Rafako's debt to creditors. This – according to the company – would allow the company to regain the ability to obtain external financing to fulfill future orders.

Another reason was indicated as “exhausting the possibility of finalizing such arrangements with key creditors (…) within the time horizon required to conduct uninterrupted operating activities (…), due to a significant additional deterioration of current liquidity (…) resulting from in particular from the circumstances reported by the Issuer in current report no. 41/2024 of September 9, 2024, informing about the completion of the mediation proceedings by JSW KOKS SA.

It was then reported that JSW Koks had completed mediation proceedings with Rafako regarding the construction of a coke oven gas-fired heat and power plant in the coking plant in Radlin (Silesia). The ordering party referred, among others, to: to increasing delays in the implementation of the contract.

The agreement between JSW Koks and Rafako concerns the construction of a cogeneration power unit fired with coke oven gas with a capacity of approximately 32 megawatts of electricity and 37 megawatts of heat.

Rafako is a joint-stock company listed on the Warsaw Stock Exchange; according to information from the management board, most of its shares belong to bondholders of the bankrupt company PBG. It is a contractor of power units and a manufacturer of equipment for the energy industry. It is one of the largest employers in the region and – informed the management – currently employs almost 700 people.

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