The Ad Hoc Group, representing a group of foreign investors who have become the new owners of New World Resources and the Czech coal mining company OKD, have made clear their intention not only to save the ailing latter firm but to keep its mines running for years to come.
With a promise to invest additional funds, the new majority owners (who will control 60 percent voting rights) will be hoping to reach an agreement with the government to try and saving the long ailing OKD. The move is a reversal from the position of the former management which allowed previous talks with the government to break down or peter out, with no resolution in sight. Spokesman Roman Pařík told Czech Radio that while the new majority owners were ready to invest new funds, investment in the mining firm would depend on reaching a new agreement with the unions and the government on a new restructuring plan. Ad Hoc Group gained a majority stake in OKD owners New World Resources last week.
The big question is whether the group’s plans for saving OKD will be realistic. Czech Radio reported it was not yet clear just how much will be needed to save the troubled company, but the conventional wisdom suggests funds in the hundreds of millions of crowns (on the conservative side) and more likely billions. With current market conditions far from favourable (the price of black coal has dropped by 70 percent over the last six years) even positive steps won’t mean any transition saving the firm will be painless or that jobs won’t be lost.
The government, meanwhile, is waiting for a confirmation of the change in ownership before stepping in; it, understandably, wants to be sure it is dealing with the rightful owners before it comes to the table. Czech Radio cited the Minister for Industry and Trade Jan Mládek as saying once the change in ownership was official, the government would be ready to listen. The soonest that could happen will be within one month.
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