11/2018: Adoption of updated Strategy by PBG Management Board
The Management Board of PBG S.A. (the “Company”, “PBG”) announces that today it adopted the updated Strategy for the PBG Group, whose key elements are presented below.
The Strategy seeks to deliver long-term growth in the Group’s value by building the largest engineering and construction group in Poland around the RAFAKO Group, which enjoys a strong position in international markets, offering specialist construction services for the power sector and for the oil and gas upstream and downstream sectors.
The Group’s strategic objectives for 2018–2020 are to:
- Build a leading position in the domestic power construction market through RAFAKO S.A., by delivering and participating in the largest capital investment projects in Poland, capturing a market share in the market for services related to the modernisation of power and heat infrastructure and ensuring compliance with BAT regulations;
- Regain its position of the Polish market’s leader in the provision of comprehensive services involving management and execution of projects in the oil and gas sector, leveraging synergies between PBG Group companies;
- Expand the business in foreign markets in both of the Group’s core business segments;
- Capture a market share in the industrial construction market;
- Ensure financing for the Group’s operations.
- Restore the Group’s full creditworthiness by paying off obligations under bonds and the arrangement made by PBG with its creditors.
One of the factors contributing to achievement of the Group’s strategic objectives will be the way in which the Group is organised, with EPC and general contractor capabilities in the upstream and downstream oil and gas sectors to be transferred to the RAFAKO Group. The internal reorganisation of the Group will be effected through the merger of RAFAKO Engineering Sp. z o.o., PBG oil and gas Sp. z o.o., and PGL Dom Sp. z o.o., as a result of which RAFAKO will acquire a majority interest in the combined entity. This will increase the RAFAKO Group’s capacity to bid for and deliver projects with its extended capabilities and will naturally facilitate business growth by leveraging synergies of the merged companies. The merger will be contingent upon obtaining consents from PBG’s creditors (i.e. bondholders) and RAFAKO S.A.’s creditors (i.e. financing institutions). The companies will seek to secure the relevant consents in the near future. PBG will remain the Group’s parent, responsible for: 1) setting the overall direction and strategic objectives for the Group, 2) exercising oversight of the core business lines, 3) providing a broad range of organisational support services to its subsidiaries, and 4) supervising the divestment process. Such an organisational structure will increase the PBG Group’s transparency, while reducing the risk of conflicts of interest in bidding for new contracts.
Assigning a leading role to RAFAKO S.A. in the PBG Group’s two strategic business lines will benefit the stakeholders of PBG and RAFAKO alike by fully leveraging the Group’s business capabilities and enhancing its growth potential.
A full text of the Strategy will be published in the 2017 Directors’ Reports on the operations of the Company and the PBG Group.
current report 11/2018 (.pdf - 42,16 kB)