Elektrim, one of Poland's biggest companies, risks defaulting on its bonds next week, raising fears that it could go bankrupt.

The telecoms and energy conglomerate faces a 17 December deadline to buy back 440m euros of convertible bonds - now worth 488m euros, including interest.

But thanks to the telecoms and technology downturn it lacks the cash to comply.

The company, whose total cash reserves are 43% short at 276m euros, says nearly all of its lenders want to sell, and that it may delay the date of the full payout.

Its total debt of 753.2m euros is almost five times its market value.

To solve its problem, Elektrim is considering a rights issue.

It could also sell off some of its telecoms assets - perhaps even some of its share of its joint venture with French media giant Vivendi Universal, which runs Poland's biggest mobile operator.

Its cable unit, which alone could be worth 100m euros, is also likely to be on the block.

Meanwhile, the company is in "intensive" talks with banks and with its strategic partners, including Vivendi, on refinancing its short-term debt and bridging loans.

Rise and fall

Elektrim has long been one of Poland's flagship stocks. With roots in the communist era, its holdings once spanned sectors ranging from electricity to trade and even yoghurt production.

In the last three years the firm has focused on the phone and power sectors, but costly purchases of telecoms and Internet assets put a huge strain on its delicate finances.

Analysts say that the possible collapse of Elektrim would have a huge effect on the Poland's telecom market, reshuffling the ownership structure of the leading mobile phone firm and eliminating one of the largest fixed-line competitors.

The bankruptcy fears have slashed 50% off Elektrim's share price in December alone. The shares are 97% down on the level at which they debuted on the Warsaw bourse last year.