Shipyards closer to bankruptcy

The three ailing shipyards in Gdynia and Szczecin faced an increased risk of bankruptcy after an emergency meeting was held on Wednesday between the European Union and Warsaw that looked into restructuring plans.

European Commissioner for Competition Neelie Kroes met Polish Treasury Minister Aleksander Grad to discuss the restructuring plans that were submitted to Brussels last month and chances are growing that the aid will be declared illegal. This decision will force the shipyards to repay the aid that amounts to an estimated EUR 1 (zł.3.3) billion, which will result in their bankruptcy.

The EC is currently analyzing the plans and a decision may come next Wednesday, the EU executive said. "Kroes expressed serious doubts that the plans submitted comply with these requirements: EC state aid rules," the Commission said in a statement.

Under the EU rules, governments may give state aid to failing companies to ensure their long-term profitability; however, a Commission official who asked not to be named told Reuters that the shipyards have not made a single profitable ship over the last four years.

Source: Reuters