Hawe Telekom does not want to sell for nothing

PMR team

April 8, 2017

Share this article:

Still today, the commercial court in Warsaw will decide whether to declare bankruptcy of the telecommunications company Hawe Telekom. Such a motion has been filed by its largest creditor, Agencja Rozwoju Przemysłu, which is seeking a liquidation sale. The company's sanctioning administrator, the law firm PMR Restrukturyzacje SA, does not share this position. It believes that it is faster and more beneficial for everyone to increase the company's value and refinance its debt.

In recent days, articles about the issue have appeared on the internet and in the regional press. Hawe Telekom, in which its largest creditor – the Industrial Development Agency – disputes the facts regarding the restructuring proceedings and confirms that it is seeking to quickly sell the company to a new investor. According to ARP Hawe The telecom needs "rapid therapy, and the restructuring proceedings are like extending the drip that will not get it back on its feet", as Joanna Zakrzewska, spokeswoman for the ARP, told the daily "Polska The Times" ("Gazeta Wrocławska" of April 3, 2017).

I do not agree with this position. Rehabilitation manager companies – the law firm PMR Restrukturyzacje SA, which believes that these claims contradict the facts. The administrator indicates that thanks to the restructuring, the company's business, operational and financial situation has been stabilized, and new investments are being implemented in accordance with the restructuring plan, which has been positively reviewed by the creditors' council and approved by the judge commissioner.

- Interrupting the process restructuring at such an advanced stage and the declaration of bankruptcy of the companyin order to sell it to an unknown potential investor (ARP has not indicated any specific entity so far), creates a huge risk of destabilization of the business activity, may result in the loss of contractors and reduce the value of the company - believes Maciej Roch Pietrzak from PMR Restrukturyzacje SA.

In the trustee's view, a liquidation sale rather than a refinancing of the business or a conciliatory arrangement sale may be considered to be to the detriment of creditors and shareholders. A bankruptcy sale does not assure creditors of quick repayment of debts (the average duration of bankruptcy proceedings in Poland is three years), let alone satisfaction of creditors in full.

ARP is blocking restructuring?

The Industrial Development Agency, disregarding the provisions of the restructuring law and the prohibitions arising therefrom, accuses Hawe Telekom of allocating its entire profit for 2016 (PLN 31 million) to infrastructure investments instead of paying off debts to its creditors. In fact, in March 2016, Hawe Telekom's board of directors announced that the manager, as part of its ongoing restructuring plan, had concluded a contract for the deployment of Huawei's state-of-the-art DWDM transmission system to increase network capacity.

– This investment is being carried out in accordance with the restructuring plan, which has not been changed so far, and the creditors' council has never requested it – explains Małgorzata Anisimowicz, president of the law firm PMR Restructuring SA. – The implementation of such a plan is the administrator's duty and there is no basis for expecting that the administrator will cease restructuring activities or undertake other ones. The creditors' council did not file a motion to the judge-commissioner to change the plan, but it demands Changes to the manager, which is surprising – he adds.

According to the restructuring administrator, the agreement with Huawei gives the company a huge opportunity to increase its value and repay its debts, because the Chinese telecommunications company, in addition to technological and business support, also declares assistance in obtaining refinancing for restructuring.

According to the administrator, the ARP's expectations regarding the quick repayment of debts by Hawe Telekom.

- In the course of the sanitation proceedings, this is impossible, because it is prohibited by the restructuring law, and the proceedings themselves are prolonged due to objections filed, among others, by the Industrial Development Agency, explains Maciej Roch Pietrzak from PMR Restrukturyzacje SA. - This makes it impossible for the commissioner's judge to approve the list of receivables and set the date for voting on the arrangement, although objections as unjustified are successively dismissed by the court, he adds.

A new opportunity policy

Debt repair, revitalization and refinancing the company instead of its bankruptcy, liquidation and sale in pieces was made possible by the new act on restructuring law, which has been in force since 1 January 2016. The provisions on restructuring proceedings introduced by it are aimed at improving the financial situation of the company, its further operation and maintaining jobs. Therefore, the legislator has made it impossible to enforce the debtor's assets or liquidation bankruptcy from the moment of opening sanitation proceedings.

- The aim of the restructuring is to restore the company ability to compete on the market, settle current liabilities and refinance debt to previous creditors. Everyone should therefore be interested in building the value of such an economic entity and increasing its investment attractiveness, and not in its depreciation, slander and media obstruction of the implementation of operational activities - believes Maciej Roch Pietrzak.

As the rehabilitation administrator adds, during the restructuring process Hawe Telekom has had many cases of refusal to conclude new commercial contracts (sometimes multi-year and multi-million) due to information appearing in the media that did not correspond to reality and slandered the company.

Restructuring halted bankruptcy

This is the second one bankruptcy petition Hawe Telekom submitted by the Industrial Development Agency. It first filed such a motion in December 2015, but the Warsaw Commercial Court decided in March 2016 to start the restructuring proceedings, appointing Hawe Telekom as the administrator in the process. company restructuring PMR Restrukturyzacje SA law firm. This decision resulted in the suspension of all enforcement proceedings against the company and prevented the initiation of new ones. Hawe Telekom was the first company to benefit from the new restructuring rules.

The fate of the company, its employees, shareholders and many small creditors will now depend on the court's decision.