Centralny Port Komunikacyjny signed today a preliminary agreement to purchase a controlling stake in Torpol, a company specialising in the modernisation and construction of railway infrastructure. The capital commitment to an experienced infrastructure construction company is expected to facilitate the construction of the CPK spokes, i.e. the railway lines leading, among other, to the new airport.
The purpose of the agreement signed today is the acquisition by CPK of a controlling stake in the Torpol joint-stock company (38% of shares) from Towarzystwo Finansowe “Silesia” (TFS), which is currently its largest shareholder. The transaction was conducted according to market standards. It was subjected to a financial feasibility analysis and received a positive result in the private investor test.
The aim of the CPK investment in Torpol is to mitigate the risk of the lack of adequate contractor resources for the ambitious CPK investment programme. From our point of view, it is important that railway contractors are capable of implementing extensive investment programmes, have financial credibility and at the same time are competitive
As noted by the minister, problems in the implementation of large railway investments in Poland to date have resulted from limitations on the part of the contractors, e.g. in terms of competence, equipment, personnel and finance, and sometimes also from inadequate risk sharing between the contractor and the contracting authority. “The acquisition of a contractor by CPK will stimulate further development and competitiveness of the construction market, which is needed for the investments we design,” adds Marcin Horała.
CPK is the largest infrastructure programme in Poland. Torpol is one of the most important construction companies in Poland. CPK’s takeover of Torpol does not mean that it will obtain contracts on a preferential basis. However, both parties can confidently invest in a long-term relationship based on trust. CPK as a strategic investor in Torpol is good news for other ordering parties and for the Polish infrastructure market, for which project implementation methods based on partnership cooperation between the ordering party and the contractors are another development leap
Key benefits of the transaction include reducing the risk of a shortage of the necessary contractor resources for the CPK railway investment. The purchase allows CPK to access Torpol’s resources and both parties to adjust the allocation of investment risk between the contracting authority and the general contractor.
“Towarzystwo Finansowe Silesia is a state-owned company under the supervision of the Minister of State Assets, which has a good track record in terms of successful projects. One of them is the development of Torpol, which took place during the period of Silesia’s capital commitment,” says Karol Rabenda, Deputy Minister of State Assets. “The acquisition of an industry investor for Torpol creates an opportunity for further growth of the company’s position on the railway investment market and at the same time is important for the strategic CPK project. We wish the CPK management a successful takeover in building value, not only for the company and its shareholders, but also for our country,” he adds.
The president of TFS, Jadwiga Dyktus, emphasises that TFS has been actively involved in important investment and restructuring processes of large state-owned entities for 20 years: “The company seized the investment opportunity by participating in Torpol’s IPO and, as a financial investor, performed its role to the best of its ability. We assure both CPK and Torpol’s shareholders that today it is a professionally managed company with efficient risk management, an innovative organisational culture, an excellent management team and a team of around 800 employees dedicated to the success of their company,” she emphasises.
Torpol has implemented greenfield projects in the past and has a multi-discipline practice in delivering investments in the railway, road and enclosed structure sectors. The company was responsible, for example, for the construction of the Łódź Fabryczna railway station.
Torpol is prepared to handle large multi-discipline contracts. It has the human, financial and equipment resources to tackle the challenges facing the railway construction industry today. TFS, as an investor and as an interim participant in the financing of the company, has a significant stake in the creation of shareholder value,
Once the Torpol agreement is signed, the next step for CPK is to obtain corporate approvals and apply to the Office of Competition and Consumer Protection for approval of the transaction.
CPK is preparing the construction of 10 spokes, leading from different regions of Poland to Warsaw and the new airport. In total, this amounts to around 2,000 km of new railway lines to be completed by the end of 2040. Feasibility studies (SEEs) are already being developed for 1,500 km of them. Of these, CPK already has investor variants for a 140-kilometre section of High Speed Rail between Warsaw and Łódź, 200 kilometres between Łódź and Wrocław and 40 kilometres in the Rzeszów area. In the first half of the year, the company plans to start work on the construction of a 4km long-distance railway tunnel in the Łódź Fabryczna area.