The District Court for the Capital City of Warsaw officially opened restructuring proceedings for PKP Cargo. The company stated that a massive restructuring through cost reduction is the only way to remain afloat and achieve financial stability. It is not yet clear what the timetable for these proceedings will be.
Once the goals are achieved, an arrangement proposal will be presented to PKP Cargo’s creditors. If they accept, the repayment of liabilities can begin, the company explained. “During the reorganisation procedure, PKP CARGO will carry out all contracts and orders. It will also participate in tenders and public procurements”, said Dr. Marcin Wojewódka, the company’s acting president.
PKP Cargo will not go bankrupt
The request to commence restructuring proceedings was filed with the Warsaw District Court at the beginning of July. The court gave its approval on Thursday 25 July. These proceedings are not equivalent to bankruptcy since the company does not have the right to go bankrupt, as the Polish Minister of Infrastructure recently highlighted.
“Unfortunately, however, the company might cease functioning if it loses financial liquidity, which in practice would involve the loss of jobs by most employees”, PKP Cargo added. Throughout the restructuring period, the company’s management and supervisory boards will continue to operate, and PKP Cargo will remain listed on the Warsaw Stock Exchange.
Workers are the sacrificial lamb
In order to avoid a gargantuan number of layoffs, the Polish rail freight operator found agreements with various rail companies in Poland to transfer some of its employees. The latest agreement concerns the transfer of some PKP Cargo employees to PESA Group, a state-owned rail rolling stock manufacturer. Although PKP Cargo did not specify how many workers will be moved, PESA stated that 500 new jobs should be available “in the coming years”.
This is the fifth deal that PKP Cargo struck with other companies to transfer hundreds of workers amid a massive restructuring, which commenced at the beginning of July. The other agreements entail the transfer of PKP Cargo employees to Polregio (up to 300), PKP Intercity (up to 400), PKP Intercity Remtrak (up to 300) and PKP PLK (up to 250). If PESA absorbs 500 more, the total number of PKP Cargo workers being transferred will be over 1,700.
Despite these efforts, over 4,000 PKP Cargo employees, roughly one-thrid of the total workforce, will still lose their jobs. Moreover, another third of them have been put in inactive status as of 1 June 2024. This means that they are forced to stop showing up for work and they lose 40 per cent of their salaries.