In Business News this week: Mining group NWR comes up with better than expected results but crunch meeting over restructuring still looms; tax offices are getting tough over dubious breaks for research and innovation; |Slovak government jumps in over Slovenské Elektrárne sale; Swiss developer plots arbitration over Prague land purchase; and Czech Railway showcase service could hit rails.
Mining group New World Resources, the owner of Czech hard coal company OKD, drastically cut its half year losses in spite of continued low coal prices. The group announced a net loss of 57 million euros for the first six months compared with almost 400 million euros in losses during the same period a year earlier. One positive point from the latest report is that operation costs have been trimmed by around 25 percent. A decisive announcement should be made next week on whether sufficient NWR creditors have agreed a restructuring plan or if an assets sell-off will be sparked to cut its heavy debt burden.
A row has broken out over tax breaks that companies seek for their investments in research and innovation. The clash has been sparked by tax offices’ determination to police the large write offs that some companies are claiming although they have no clear results to show for the cash spent. According to the business daily Hospodářské Noviny, one producer of parts for the car and electronics sectors has already gone to the courts to challenge the tax office. The paper says hundreds of other companies are waiting on the result with a large part of the annual 10.5 billion crowns in tax breaks for research and innovation at stake.
The biggest energy deal on the horizon - the sale of Italian ENEL’s two-thirds stake in Slovakia’s biggest electricity company, Slovenské Elektrárne, in which Czech power giant ČEZ is reckoned to be one of the prime contenders – has taken a new turn. Slovak prime minister Robert Fico this week said his government would like to boost its position in the power company which supplies around 80 percent of the county’s electricity. It currently has a 34 percent stake. Russian and Chinese companies as well as ČEZ are reported to be circling the ENEL controlling shareholding.
High profile Swiss property developer Sebastian Pawlowski has confirmed he is preparing an arbitration case against the Czech state for a reported 2.5 billion crowns. The well known Prague developer says he has already recruited a London law company to handle the dossier. The case centres on land bought by one of the developer’s Swiss companies which in 2010 reclassified as being suitable for construction by Prague city hall. But that decision was later overturned with the land again being designated as part of outer Prague’s green zone. Pawlowski is noted for his previous close ties with former Prague politicians.
Rail passenger company Czech Railways is facing a major headache in trying to match locomotive to the new Railjet carriages that has bought for international services between the Czech Republic and Austria. Siemens Taurus locomotives had been lined up for what the company hoped would be the November launch of its showcase service. But the Czech competition office stepped in and banned the deal because a proper tender had not taken place. Czech Railways says no alternative locomotives can be found in time and Siemens is refusing to sell the software needed for other locomotives and the carriages to work properly together. Without such software, carriage lights and air conditioning will not function.