PKP Cargo Proposes Fast-Track Debt Restructuring and Targets Full Settlement by 2027

PKP Cargo has proposed an accelerated debt restructuring plan that would allow the company to settle its obligations by the end of 2027. The proposal combines partial debt repayment, debt-to-equity conversion and new share issues as part of a broader effort to restore the company’s financial stability.

PKP CARGO S.A., which has been undergoing restructuring proceedings in Poland under court supervision since 2024, has submitted the final version of its settlement proposal to the court. Under the plan, PKP Cargo intends to implement a fast-track debt restructuring process based on the early settlement of liabilities and the restoration of the company’s financial and operational stability. The solution is designed to enable the Polish national freight operator to return to competitive market operations.

The original restructuring timetable envisaged debt repayments continuing until 2036. Under the new proposal, all obligations would be settled by the end of 2027.

"The tough restructuring measures implemented in 2025 have already delivered tangible results – the company returned to positive operating performance, confirming the effectiveness of the actions taken. However, in order to permanently resolve the issue of total debt amounting to PLN 2.9 billion (approximately EUR 680 million) and create room for further development and adaptation to the changing rail freight market, comprehensive deleveraging is required. Therefore, in the settlement proposal we combined the repayment of part of the claims and the conversion of part of the debt into equity with partial debt forgiveness within the PKP Group. We are working to increase the company’s value because this directly translates into the real value of creditor recovery, including through debt-to-equity conversion," explained Zbigniew Prus, Chairman of the Management Board of PKP CARGO S.A.

Debt Repayment Combined with Debt-to-Equity Conversion

The proposed settlement solutions were designed to balance the interests of all creditor groups with the actual financial capacity of PKP CARGO S.A. under restructuring, while also taking into account the long-term interests of the company and its shareholders.

Creditors have been divided into seven groups in accordance with Polish restructuring law, with different settlement mechanisms proposed for each group depending on their legal and financial position.

Details of the settlement proposals and their full wording have been published by PKP Cargo in the report.

The restructuring plan combines three elements: part of the claims would be repaid in cash, part converted into the company’s equity, and part written off. The write-offs primarily concern companies within the PKP Cargo Group, which, as related creditors, would absorb a larger share of the burden in order to prioritise the settlement of external creditors.

The new settlement proposals were submitted to the court on 29 May 2026. The next stage of the process will be approval by creditors, which is expected by the end of 2026. The first share issue is planned for the end of 2026, with a second issue expected in the first half of 2027. The cash component of creditor repayments is scheduled to be completed by the end of 2027.

"The differing conditions between creditor groups are not our decision but result directly from restructuring law and the different legal status of each group. This division reflects the actual nature of the claims, including their security, maturity and the position of each creditor in relation to the company. Within each group, creditors are treated equally, ensuring transparency and predictability throughout the process. The settlement of obligations should be completed in 2027 and confirmed by a court decision approving the fulfilment of the arrangement, which could allow dividend payments to resume within a few years. When preparing the proposals, we followed the principle of offering solutions that would be as beneficial as possible for creditors while remaining manageable for the company. Only such an approach provides a realistic guarantee that the arrangement can be fulfilled," said Paweł Miłek, Vice-Chairman of the Management Board of PKP CARGO S.A.

According to the company, the current settlement proposals provide creditors with higher financial value over a shorter period while allowing PKP Cargo to exit restructuring earlier and regain the ability to pursue further development. The alternative would be continued operation under a high debt burden, limited financial flexibility, and a growing risk of value erosion.

PKP Cargo Plans Share Issues and Capital Strengthening

The next phase of the restructuring process consists of a package of capital measures aimed at permanently stabilising PKP Cargo’s ownership and financial structure and bringing the restructuring and deleveraging process to a close.

The package includes:

• a share issue for the strategic shareholder, PKP Polskie Linie Kolejowe S.A.’s parent holding company PKP S.A., to maintain its current 33% stake;
• the issue of warrants for employees as part of an incentive programme;
• a share issue primarily targeted at existing shareholders.

This structure would allow PKP Cargo to raise capital without increasing operational debt, while also enabling part of the outstanding claims to be converted into equity and reducing debt financing associated with the restructuring process.

The employee warrant programme is intended to retain key expertise and know-how within the organisation and increase employee engagement, which the company considers essential for successful restructuring and value recovery.

At the same time, the involvement of PKP S.A. is expected to guarantee ownership stability and predictability throughout the process while preserving the current control structure.

Capital Reinforcement After Restructuring

PKP CARGO S.A. is regarded by the Polish state as a company of strategic importance to the national economy and security. The company must maintain its ability to operate continuously, invest, and adapt to changes in the transport market.

The proposed capital package is intended to create the conditions necessary to achieve these objectives over the long term. The structure of the planned share issues also includes stabilisation mechanisms, including a two-year lock-up period, while allowing existing shareholders to participate in the company’s recovery.

Management, led by CEO Zbigniew Prus, views the proposal as a coherent and comprehensive solution because it combines creditor settlements with the planned capital measures. According to the company, it offers a realistic path to recovery for all parties involved.

Creditors would receive earlier and measurable value, shareholders would have the opportunity to participate in future growth free from restructuring constraints, and PKP Cargo itself would secure the capital needed not only to implement the arrangement but also to finance investments in promising market segments and support future expansion.

"This solution allows us to close the restructuring phase and begin a new chapter in the history of PKP CARGO," said Michał Łotoszyński, Member of the Management Board responsible for Finance.