Keeping the shipyard afloat

The shareholders of Stocznia Gdynia have decided that despite the shipyard's significant financial difficulties, the company has enough potential to continue its activities. The combination of a global run on steel and a drop in the value of the dollar led to the company losing zł.270 million last year. Currently, the company is indebted to the tune of zł.500 million. The shipyard estimates that it needs about zł.1.15 billion to cover its debt while making necessary investments.

The shareholders' high expectations follow from the prospect of the shipyard's impending privatization, included in the government's strategy for privatization of the shipyard sector.

Under the plan, Stocznia Gdynia is to find a strategic investor before June of this year. Although no binding decisions on a specific investor have yet been made, the most advanced negotiations have been going on with a Ukrainian concern, the Industrial Union of Donbass. "The two critical issues in the talks with Donbass are the value and amount of shares to be sold, and the degree of the debt to be covered," Janusz Wikowski, the shipyard's spokesman and advisor to the management board, told WBJ. Israeli investor Rami Ungar, whose firm, Ray Car Carriers, currently owns just under 17 percent of the shipyard, has also been mentioned as a possible future strategic investor.

Wikowski stresses that the company has huge potential. "We expect at least a five-year of boom in the ship branch," he declares. "Especially in the car-carrier segment in which our shipyard is particularly adept." He adds that although the company forecasts a loss of zł.38 million in 2007, it is expected to generate profits from 2008 forward.