Prague - In response to bad financial results from the first quarter of 2013, Czech billionaire Zdenek Bakala's New World Resources (NWR), a coal mining company, decided to offer its Ostrava-based OKK coking plant for sale. According to experts, the most likely bidders are companies from Poland, above all the Jastrzebska Spolka Weglova (JSW) coal mining company.
"It is the most logical option. JSW is active in the same coal basin, it is much larger than NWR, it has at its disposal more cokeable coal that can be processed at OKK," said Carbounion Bohemia owner Petr Paukner, adding that JSW is also interested in buying OKD, another daughter company of NWR.
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Former Penta Investments director Jozef Janov agrees that JSW is the most likely bidder, adding that another company interested in purchasing OKK is Polish coal exporter Weglokoks.
"Some metallurgical companies in the Central European region may also be interested, especially the ArcelorMittal group. Some private equity funds are also among potential buyers," said Patria analyst Tomas Sykora. The analyst said though that metallurgical companies are currently facing unfavorable business conditions and are forced to limit their production.
Sykora and other experts agree that Czech companies will not bid to buy OKK. "Most Czech investors have no reason to buy OKK," said Paukner. According to him, the only possible Czech bidder is Petr Otava's Metalimex.
Komercni Banka analyst Josef Nemy estimates the value of OKK at between EUR 30 million and EUR 40 million. Nemy said that OKK's EBITDA will probably drop from last year's EUR 12 million to a half this year. "Mining companies are usually traded for five or six times their EBITDA," explained the analyst. "But it is a very rough estimate," he added.
NWR was badly hit by the global economic crisis in 2008 and 2009.
