Business News

Orco raises cash and protests from minority shareholders

One of the biggest real estate development companies in the Czech Republic, Orco, has raised 16.2 million euros in a bid to bolster its fragile financial foundations. The last of three capital hikes over the last fortnight was announced on Thursday. But the first two increases have already been challenged by a group of shareholders which have demanded that they are cancelled. They are angered that the shares were sold below the market price with existing shareholders not being allowed in advance to take advantage of that discount. Orco was given protection from its creditors last year and has been trying to restructure a debt burden amounting to more than 400 million euros.

Coke producer NWR announces rocketing prices

Soaring prices for the coke used to fuel steel plants has boosted the fortunes of Czech coal mining company New World Resources. NWR announced an almost 90 percent rise in the prices it will charge to deliver coke compared with the average for 2009. The latest prices are almost half as much again for those in the first quarter of the year. NWR supplies central European steelmakers, but coke prices have also been pushed higher worldwide by a strong resurgence in Asian steel producers. Shares in NWR gained around a third since the announcement of the new supply contracts.

Betting lobby loses battle over gaming machines

The powerful gaming machine lobby this week lost a key battle against those trying to curb its pervasive presence. Changes to the lottery law were voted in the lower house of parliament allowing local councils to ban gaming machines including the most modern video terminals. At the moment councils only have jurisdiction over the less lucrative old gaming machines. But the battle is not yet over with the upper house, the Senate, still having to approve the move. It is estimated that Czechs bet around 30 billion crowns every year.

Hyundai car workers win large pay rise

South Korean car maker Hyundai has announced an average wage increase for workers at its Nošovice plant in the far east of the country of 7.0 percent from April. It is the last of the country’s three big car makers to declare a wage deal for this year. Earlier in the week the Toyota and Peugeot-Citroen joint venture at Kolín announced a 2.5 percent rise. The biggest Czech carmaker, Škoda Auto, settled on a 2.7 percent average increase earlier. According to reports, wages for the around 2,000 workers at the Hyundai plant were substantially lower than those at other car makers.

Parties eye windfall from sale of ČEZ stake

The two biggest Czech political parties have their eyes on a potential windfall from selling part of the state’s dominant stake in power giant ČEZ. Leaders of both the Social Democrats and Civic Democrats say they could trim the state’s shareholding from around 70 percent to 55 percent. That could bring the next government around 75 billion crowns, or around 4.2 billion US dollars, based on its current share price. The parties say the windfall could be used to fund an overdue shake up of the state pension system.