Polish meat producer PKM Duda could be facing the threat of bankruptcy. Kredyt Bank last week closed 17 derivatives contracts with the firm and demanded the payment of zł.27.6 million by last Wednesday.

Duda did not meet this deadline, however. According to its consolidated report for Q4 2008, the firm’s cash reserves amounted to zł.17.4 million.

“We are conducting talks with banks, including Kredyt Bank, on the subject of debt restructuring. For the good of negotiations, we’re not going to reveal any information,” the firm’s management said in a statement sent to Puls Biznesu.

When the news broke last Thursday, Duda’s share price dropped by almost 10 percent. It recovered somewhat to end the day down 4.7 percent, at zł.0.60. At close of trade on Friday, it stood at zł.0.61.

“The company needs to undergo recovery proceedings because it’s not in a state to pay its obligations. If a court prevents this or the firm isn’t able to reach a settlement with creditors, bankruptcy will become very likely,” Erste Securities analyst Artur Iwański told Puls Biznesu.