In this week’s business news: Czech banks are getting ready to sign off on what could be the largest-ever club deal, negotiations between Škoda Auto management and unions continue, the Czech Agrarian Chamber’s president has said that egg prices will stabilize, the cost of fuel has hit a record high and the American coffee retailer Starbucks has opened its first Czech branch outside of Prague.
Czech banks to commit to largest-ever club deal
Czech banks are in the process of committing to a 1-billion-euro loan to the energy group Energetický a Průmyslový Holding (EPH) according to a report by the Reuters agency which cites two sources from the banking sector. Should the loan be finalized, it would be the largest club deal in history on the domestic market, with up to 12 banks expected to join. EPH is applying for the 6-year-partial refinancing loan to finance its ambitious expansion strategy in Germany, Slovakia and the Czech Republic. Among the banks involved are UniCredit, the Erste Group, Česká Spořitelna, ČSOB and the local unit of ING. Over 20 companies in the electricity, heating and coal sector are part of EPH.
Negotiations between Škoda Auto management and unions continue
Škoda Auto has offered its workers a wage increase of 4 percent in the 9th round of negotiations between unions and the company’s management. Manufacturing workers had asked for an increase of 6.5 percent. The next round of talks is set to take place on Tuesday. Škoda Auto unions have threatened a strike and, along with the pay increase, are also demanding an increase in bonuses, and an incentive share in the company’s record profits. Škoda Auto sold 879.200 cars in 2011, a year-on-year increase of 15%. The average wage for manufacturing workers was 32,000 crowns in 2010, according to the unions.
Czech Agrarian Chamber: Egg prices to stabilize
According to the Czech Agrarian Chamber, the retail price of eggs in the Czech Republic is not expected to rise further after a steep incline in their cost in recent weeks. Egg production across the EU dropped as a result of a recent EU directive on laying hen farms; by consequence, the Czech market was hit by increased prices for eggs. The president of the chamber, Jan Veleba, has blamed politicians for taking a wrong approach to laying hen farming, which had lead to the country’s dependence on imports of eggs He added that while prices would not drop to the previous rate of two to three Czech crowns per egg, their cost would stabilize somewhat over the coming weeks and months.
Fuel prices hit record high
Fuel prices in the Czech Republic have hit a record high. According to data from the Czech Statistical Office, the most-sold petrol type, Natural 95, currently retails for 36.61 Czech crowns per liter, up by 0.15 crowns as compared to the previous week. Experts predict that fuel prices will continue growing. Domestic carriers have started passing on the increased petrol prices to customers. The biggest association of carriers, Česmad Bohemia, is pushing for a contractual solution that would allow rises in fuel prices to be passed on to customers automatically.
Starbucks opens first Czech location outside of Prague
The American coffee shop chain Starbucks will open its 13th Czech location in the Moravian city of Ostrava in late March. It is the first shop to open outside of the capital. The new location will feature an unusual interior design that is meant to reflect the region’s mining past; it will be dominated by wood and metal and be unlike any other location in the country. Starbucks is also planning to expand its presence in other Czech cities such as Brno and Prague.