photo: GT1976 / CC BY-SA 4.0 / Wikimedia Commons/PKP Cargo Wagon
PKP Cargo bets on a grain terminal to replace coal transport, as asset sales and restructuring aim to solve financial woes.
Poland’s freight railway operator, PKP Cargo, is searching for a way out of its deep financial troubles. Selling key assets and investing in a new grain terminal are central to its efforts to offset the loss of coal transport revenues.
One strategy to address its prolonged financial struggles, alongside restructuring and layoffs, is asset sales. PKP Cargo plans to sell its subsidiary Cargotor, which manages the transshipment terminal in Małaszewicze. This terminal is located on a key corridor near Brest, on the Belarusian border.
PKP Cargo intends to sell the terminal to PKP PLK, the arm of the PKP holding group responsible for managing rail infrastructure. Within Polish industry circles, comparisons have been drawn to the sale of DB Schenker by Germany’s DB to stabilize the struggling DB Cargo. Poland aims to take a similar approach and is preparing documents for the European Commission, which will review the transaction, much like it did for the DB Schenker sale, to ensure it does not constitute unlawful state aid.
Read more
The Green Deal is reshaping Europe’s freight landscape, and PKP Cargo is paying the price. With massive losses, shrinking market share, and tough competition,…
The Difference Between DB Cargo and PKP Cargo
The notification process is expected to conclude in the coming months. According to acting CEO Marcin Wojewódka, there is a significant difference between the German and planned Polish transactions. While DB Cargo is fully owned by the German state, 67% of PKP Cargo shares are held by private investors. Therefore, selling the terminal will require not only discussions with PKP SA’s leadership but also negotiations with these stakeholders.
PKP Cargo Drowning in Debt
PKP Cargo’s restructuring faces additional challenges, particularly the debts owed to other Polish state-owned entities. These include arrears to PGE Energetyka Kolejowa for traction energy and to PKP PLK for rail infrastructure usage. These obligations, combined with loans from state banks, make up the bulk of the company’s liabilities.
PKP Cargo's New Leadership and a Coal Alternative
Developing a long-term strategy will fall to a new, permanent management board. The current interim board, composed of supervisory board members, will step down on January 25, 2025. In November, the company announced a search for new board members, with acting chairman Marcin Wojewódka confirming his candidacy after previously stating he would not run for the position.
To address the loss of coal transport, PKP Cargo has turned its focus to a new project: constructing a grain terminal at the port of Gdańsk. This initiative, recently endorsed by Prime Minister Donald Tusk, could involve PKP Cargo acquiring a stake in Port Gdański Eksploatacja, according to Rynek Kolejowy.
While financial markets initially viewed the restructuring positively, the sentiment shifted in the fall. PKP Cargo’s share price has returned to the same level it was under the previous management. The company faces a long and challenging road ahead.
Source: PKP Cargo; RAILTARGET; pap.pl; polskieradio.pl