The Management Board of Grupa Azoty Polyolefins, a subsidiary of Grupa Azoty, has decided to initiate restructuring proceedings in the form of arrangement approval proceedings with its creditors. The arrangement date has been set for 28 November 2025. The decision is linked to the loss of the ability of Grupa Azoty Polyolefins to service its current liabilities and was preceded by an analysis of available remedial tools intended to enable the company’s continued operation.
The purpose of the arrangement approval proceedings is to conclude an agreement with creditors that will enable the continuation of operating activities, including the implementation of the Polimery Police project, by settling liabilities to creditors and stabilising the company’s financial situation. The announcement emphasised that the restructuring measures are to take into account the protection of the interests of employees, business partners, creditors and shareholders. Formal debt restructuring was also indicated as one of the conditions set out in Orlen’s non-binding offer to acquire all shares in Grupa Azoty Polyolefins.
The proceedings are intended to facilitate a coordinated response by the company’s creditors to the arrangement proposals, also in the context of the offer submitted by Orlen. The Management Board of Grupa Azoty Polyolefins links the restructuring process to the prospect of stabilising the Polimery Police project, which remains a key undertaking in the area of polypropylene production and logistics of its feedstocks and products.
Arrangement proceedings and Orlen’s offer conditions
According to the company’s information, formal restructuring of Grupa Azoty Polyolefins’ debt is one of the conditions included in Orlen’s non-binding offer dated 15 October this year. The offer concerns the acquisition of 100% of the shares in Grupa Azoty Polyolefins, and thus a potential change of ownership of the entity responsible for the Polimery Police project.
“The objective of the proceedings is to organise the debt issues of the project company and to work out an agreement with creditors so that the company can continue to operate in a stable manner and the continuation of the Polimery Police project remains realistically possible. At the same time, formal debt restructuring is one of the conditions set out in Orlen’s non-binding offer of 15 October this year regarding the acquisition of 100% of the shares in Polyolefins. The coordinated initiation of talks with the company’s creditors and the course of the proceedings will enable us to make a decision regarding Orlen’s offer, of which we will inform the market in a relevant report,” comments Andrzej Skolmowski, President of the Management Board of Grupa Azoty.
As indicated in the announcement, conducting arrangement approval proceedings is intended to create a platform for a unified and organised dialogue with creditors, including with regard to the potential effects of implementing Orlen’s offer. The structure of the debt and the method of its restructuring will be a material factor both from the perspective of creditors and any potential future investor.
Operational issues of the Polimery Police project
The Polimery Police project, comprising a complex of polypropylene production units and auxiliary infrastructure, has not yet been completed. The company reports that recurring failures of the installations have led to a halt in production and, consequently, in the sale of products that constitute the main source of revenue for Grupa Azoty Polyolefins.
Remedying the effects of the failures and completing and commissioning the installations require additional funding. According to the company, in the current financial situation Polimery is not able to secure on its own the financing necessary to complete the project and restore regular production. This translates into a deterioration in its ability to service liabilities and the need to use restructuring tools.
The current technical and financial problems of the project have a direct impact on the market potential of the installation, whose start-up was planned as an important reinforcement of domestic and regional polyolefin supply, in particular polypropylene, for plastics processors.
Bankruptcy petition and focus on restructuring
In parallel with the decision to initiate arrangement approval proceedings, the Management Board of Grupa Azoty Polyolefins filed a bankruptcy petition with the court. At the same time, the company requested that the examination of this petition be suspended until the filing of an application for arrangement approval or the final discontinuation of the arrangement proceedings.
“We are focusing on restructuring measures intended to enable GA Polyolefins to continue its operations. Filing a bankruptcy petition results from formal requirements and does not in itself mean bankruptcy,” explains Skolmowski.
The described course of action means that the company continues to regard debt restructuring within the framework of arrangement proceedings as its main scenario. The bankruptcy petition serves as a safeguard measure related to the obligations of the management board in a situation where the company has lost the ability to meet its liabilities, while the priority remains to reach an agreement with creditors that will enable the project to continue operating.
