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July 19, 2002

Help for Polish yards

Poland's Economy Minister Jacek Piechota has pledged more than $187 million in state guarantees for the shipyard industry and its suppliers, according to Polish press reports. Piechota warned that the sector cannot expect systematic and constant government support.

The government is to extend loan guarantees of about $37 million to state owned engine builder Cegielski and $150 million to the privately owned Gdynia Shipyard group.

Gdynia is considered a high-risk company by banks since the June bankruptcy filing of the Szczecin Shipyard. The government is now trying to foster relaunch of that yard as the New Szczecin Shipyard.

Piechota said future consolidation of the Szczecin yard and the Cegielski and Gdynia companies is possible. But he said "We cannot talk about consolidation until all these companies are financially healthy. If we consolidate sick businesses, we can talk only about a hospital".

Piechota charged that the main cause of the Szczecin Shipyard's collapse was mismanagement. Earlier this month, the yard's former president and four board members were arrested on embezzlement charges.

Prosecutors said the five were involved in transferring shares between the shipyard and Grupa Przemyslowa, a company they created that owns some 50 percent of Porta Holding, which in turn owns and runs the Szczecin shipyard and some 30 other smaller companies.

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