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JSW Chief Executive Exit Fuels Uncertainty Over Prairie

 


 

June 11, 2019 - Polish coking coal producer Jastrzebska Spolka Weglowa (JSW) today dismissed its president and chief executive Daniel Ozon in a move sending coking coal-related share prices down on the Warsaw Stock Exchange for JSW and exploration company Prairie Mining.


Prairie has been in negotiations with JSW over a potential sale of its mining licences in Poland, and is therefore also being affected by sentiment surrounding today's news. Its share price in Warsaw fell by 21pc on Tuesday amid apparent worry among investors that Ozon's dismissal may complicate negotiations.


Ozon — who became chief executive of JSW in November 2017 — has publicly promoted the idea of JSW investing in Prairie assets in order to boost its own coking coal deposits. Prairie owns two mining projects in Poland, including Jan Karski in eastern Poland and Debiensko in the Silesia area close to JSW mines. JSW has already conducted due diligence of Prairie's assets and both companies have letters of intent to discuss potential co-operation by 28 September this year.


JSW's share price fell by 6pc today amid news of Ozon's dismissal.


The supervisory board of JSW — dominated by Polish energy ministry-appointed officials — dismissed Ozon today, giving no explanation. JSW vice-president for strategy Robert Mallek was appointed interim chief executive.


JSW decided to dismiss Ozon even though JSW trade unions organized demonstrations in front of the energy ministry today to try to prevent the dismissal. Similar trade union protests prevented a previous energy ministry attempt to dismiss Ozon in January this year.

 

The JSW Solidarity trade union on Tuesday published a statement saying that it is concerned that the energy ministry would push JSW to invest in unprofitable projects such as the acquisition of thermal coal mining assets of Polish utility Tauron or investment in Polish electric vehicles, projects which Ozon opposed.