Poland, foreign investors agree to save historic shipyards

(WARSAW) - A week before an EU deadline, Poland on Friday signed a "final agreement" with investors to save three Polish shipyards from bankruptcy, the treasury ministry announced.

"The plans concerning the three shipyards (in Gdansk, Gdynia and Szczecin) will be transmitted shortly to the European Commission," Poland's domestic PAP news agency quoted treasury spokesman Maciej Wewior as saying.

Wewior said investors then had until September 12, a date set by Brussels, to reply to any possible Commission observations. He did not give details about the agreements.

The investors' offers are the last hope for the survival of Poland's Baltic Sea shipyards, remembered for dealing a death blow to communism by giving birth to Solidarity, the first and only free trade union in the Soviet bloc.

Under EU competition regulations, the yards will have to repay some 2.1 billion euros (three billion dollars) in public subsidies should the plans fail to materialise.

Brussels has declined to approve a string of restructuring plans set forth by Warsaw in recent years, insisting they failed to meet competition rules. Public subsidies were too high, private investment too low and the viability of the shipyards was not guaranteed.

Owned by the state, the shipyards in Gdynia and Szczecin are sinking in debt and orders from Brussels to repay subsidies would almost certainly spell their collapse.

The highly symbolic Gdansk yard, the 1980s cradle of Solidarity's anti-communist offensive, was acquired by Ukraine's powerful Industrial Union of Donbass (ISD) last year.

But it must also undergo restructuring and is also threatened with bankruptcy.

ISD is interested in acquiring the yard in Gdynia and merging it with the Gdansk yard.

Mostostal Chojnice-Ulstein, a Polish-Norwegian consortium, is interested in the Szczecin yard.

But both investors want more public subsidies from the Polish government in order to push ahead with their privatisation and restructuring plans.