Government may subsidize Szczecin shipyard with PLN 200m (EUR 53.4m)

16-07-2007, 14:51

Warsaw (Puls Biznesu) – Companies controlled by the state will help the shipyard. Today, the GSM will decide whether to help the company regain cash flow.

The European Commission approves of the public subsidies for Polish shipyards as long as they cut capacity and get offers from private investors who will help them regain profitability. However, after six years of restructuring under the governments of SLD leftist party and PiS rightist party, in order to survive till privatization, the shipyards need more help from the state. The government has recently decided to subsidize Stocznia Gdynia with PLN 515m. Today, the GSM will consider whether to help Stocznia Szczecinska Nowa (SSN).

SSN has received state subsidies numerous times. According to the estimates by the Supreme Chamber of Control (NIK), it got PLN 2.8 billion till the end of 2005. SSN hoped to get PLN 100m this time but it looks like it needs two times more.

“It turned out that the shipyard had PLN 100m of net loss in 2006 and it had problems with credits and cash flow. Increasing the capital would help it regain the trust of creditors and subcontractors”, a person close to the shipyard revealed.

ARP, the state owned Agency for Industrial Development, and its subsidy KPS would convey the money.

“We don’t comment on the GSM”, Roma Sarzynska, ARP spokeswoman said.

There are rumors that last Friday, ARP confirmed it would increase the capital of the shipyard. Trade unions are skeptical.

“Pawel Brzezicki, ARP CEO has talked a lot about helping the shipyard but gave no details. I asked him how to raise the capital when negotiations are going on with the European Commission. No one was able to answer this question”, Andrzej Antosiewicz, SSN Solidarnosc trade union head said.

EU may decide that the subsidy is illegal help. If so, it may make SSN pay back the subsidy.

(PLN 1 = EUR 0.267)

 

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