Chinese investors back out after COVEC woes?
PR dla Zagranicy
John Beauchamp
22.06.2011 13:49
With ongoing troubles with the A2 highway construction due to financial squabbling between constructors COVEC and the Polish Infrastructure Ministry, the LiuGong concern has suspended talks over the purchase of a steel mill in Stalowa Wola, south-east Poland.
According to official statements released by the Chinese press, LiuGong decided to back out of the deal due to workers’ demands, which stipulated a guarantee of employment for five years as well as a 5 percent pay rise.
Meanwhile, the Caixin financial magazine quotes sources from the company, who state that the main reason for the suspension of the purchase is the “wave of negative information about the Chinese COVEC firm” which left the A2 construction site earlier this month.
LiuGong has already informed Poland’s Treasury Ministry over the decision to suspend the privatisation deal, leaving the date open-ended as to when it will be signed.
Unofficial figures for the purchase of the civilian section of the mill in Stalowa Wola point to around 250 million zloty (62.5 million euro). The transaction was seen as a priority for the State Treasury, which holds a 56 percent stake in the mill and whose representatives travelled to China on a number of occasions over the past months to broker the deal. (jb)
Source: IAR