Poland to sell Gdansk shipyard

Poland’s Gdansk shipyard will be sold to Ukrainian firm Donbass in a $400 million deal to avoid bankruptcy, the head of the yard said. The yard has been under threat since the European Union demanded that it cut capacity or repay an estimated 1.3 billion euros ($1.8 billion) in state subsidies it received since Poland joined the EU in 2004.

The yard’s chief executive said Industrial Donbass Union, one of Ukraine’s biggest financial and industrial groups, would acquire an 83% stake with the possibility of buying the remaining 17% from the state. ???Donbass has met all conditions for the privatisation. Thanks to this deal the problem with the European Union will be solved,?? Andrzej Jaworski said. He said Donbass will most likely decide to pay state aid back to the European Union to avoid cutting capacity.

The shipyard could not afford to pay back the subsidies, which the EU Commission says have been paid illegally, and might have been forced to close. The deal to save the politically sensitive shipyard, which could be expected to win approval from Poland’s competition watchdog, comes days before Poland is due to hold an early parliamentary election on 21 October.

Polish yards face tough competition from better-equipped western European shipyards and also from Asia.