WP's shareholders play hide-and-seek

WARSAW (03/18/2004) - The existence of Poland's oldest Internet company, Wirtualna Polska (WP, or Virtual Poland), is under threat. The final decision to announce bankruptcy will be made in court on March 26th. The disastrous condition of the company is a result of a long and fierce conflict between WP's shareholders.

The trouble began when Wirtualna Polska, the first Polish portal, established in 1995, was bought in October 2001 by TP Internet - daughter company of powerful telecommunication operator Telekomunikacja Polska (TP).

In 2001, majority shareholders signed an agreement concerning repurchasing WP shares worth US$58 million, a high amount considering the dot-com bubble blew. Soon the price of the shares fell, and now the majority shareholders say that they will not pay the amount to repurchase the shares.

The portal was forced to file for bankruptcy at the beginning of March. Last Tuesday, WP's general shareholders' meeting once again failed to agree on a planned equity increase, necessary to bail out the struggling company. The sides are determined to prolong the conflict despite the fact that the company may disappear from the Internet stage within eight days.

"The consequences of a lengthy legal battle between the shareholders are severe to the company. The management was forced to file for bankruptcy. Only a miracle can save WP," said Marek Borzestowski, president and cofounder of Wirtualna Polska.

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