Rafako and Rafamet share prices skyrocket after Donald Tusk's announcement

Tusk on the idea for Rafako TVN24

The stocks of Rafako and Rafamet experienced significant growth on Wednesday. Prime Minister Donald Tusk declared on Tuesday that these companies would receive more than PLN 700 million in assistance via the Industrial Development Agency (ARP).

On Wednesday, shortly after 10 a.m., the share price of Rafako surged by 6.71 percent to PLN 1.81, with a trading volume of PLN 17.91 million, while Rafamet’s share price increased by nearly 20.8 percent, reaching PLN 61.

Rafamet is the fastest-growing company among those listed on the WSE, and Rafako is exhibiting the highest trading volume.

Rafako company price in the last 3 days stooq.pl

Rafamet’s share price in the last 3 days stooq.pl

Prime Minister Donald Tusk’s announcement

– I have decided to allocate over PLN 700 million to the Industrial Development Agency. This funding will be utilized to assist (…), including two companies from Racibórz. Naturally, one is Rafako, and it pertains to initiating new production. We will determine what is feasible. (…) However, we will ensure that the funds are made available to turn this into reality through the Industrial Development Agency – stated the head of government on Tuesday. He further mentioned that the second recipient of support is Rafamet, and the aid should enable it not just to survive but to grow.

In the last fortnight, since the Prime Minister’s initial announcement regarding assistance, Rafako shares have appreciated by 165% by Monday’s close, from PLN 0.42 to PLN 1.19.

Conversely, Rafamet’s shares have risen by approximately 172.6 percent during the same timeframe, from PLN 11.3 on April 15 to PLN 24.6 at Monday’s close.

In mid-April, the prime minister revealed that the state would invest in preserving the Rafako company, which had been declared bankrupt by a court several months prior. The facility, which had been active in the energy sector for years, was intended to pivot towards arms production.

Rafako’s Challenges

Rafako is a contractor for power units and a manufacturer of equipment for the power sector, and for years has been one of the largest employers in the Racibórz region. The head of government indicated two weeks ago that while the continuation of Rafako’s existing operations is unviable, there is nothing preventing the commencement of arms production in the facility that once produced boilers.

Rafako’s management filed for bankruptcy in September 2024. They cited the inability to reach an agreement with key creditors regarding the specific terms for converting the company’s liabilities into shares of the increased share capital or an alternative restructuring plan, which would facilitate debt reduction. According to Rafako, this could restore the company’s capacity to secure external financing for fulfilling future orders.

The management explained that the loss of financial liquidity and the necessity to file for bankruptcy stemmed from JSW Koks terminating mediation with Rafako before the General Prosecutor’s Office and reclaiming PLN 20 million from the guarantee deposit, along with a demand for an additional PLN 35 million in guarantees. The agreement between JSW Koks and Rafako involved the construction of a cogeneration power unit powered by coke oven gas, with approximately 32 MW of electrical and 37 MW of thermal power. JSW Koks justified its actions by citing Rafako’s substantial overruns in both deadlines and costs associated with the contract.

In March of this year, the Ministry of State Assets announced that it was exploring options for Rafako to ensure the company could continue its operations. The ministry also noted that ARP was engaged in discussions with a potential investor concerning the acquisition of the company and the establishment of a financing model.

Rafamet’s Status

Rafamet has recently revealed its strategy for the restructuring process. This plan includes, among other things, the recapitalization of the company by its primary shareholder, ARP. Rafamet has also put forward preliminary proposals for repaying creditors.

The company has announced that its management intends to initiate restructuring measures, and strategic initiatives will encompass a technical audit of the production process, aimed at optimizing production logistics and aligning the employment structure with the company’s production nature, as well as an assessment of the company’s assets, diversification of sales, and stabilization of the financial situation through the provision of funds for ongoing operations and the execution of investments and initiatives.

About the Companies

The Rafako Group serves as a general contractor for power units and is a leading European producer of boilers. It designs and manufactures boilers, including those for supercritical and fluidized parameters,

Źródło