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LiuGong postpones completion of HSW deal


2011-06-21



Guangxi LiuGong Machinery, the Chinese construction machinery group, has suspended until further notice talks about the purchase of the civilian part of Huta Stalowa Wola (HSW), the state-owned maker of earth-moving and military equipment, deputy treasury minister Zdzislaw Gawlik announced on 20 June. The transaction, whose value is estimated at about PLN 250m (€63m), had been scheduled to be finalised on 29 June.

The Chinese firm blamed the delay on lack of agreement with trade unions about job protection and related issues, and said it needed more time. However, some sources and observers linked the move to the recent decision by the Polish government to walk away from a big motorway-building contract with Covec of China amid delays and disputes with subcontractors, and the related political sensitivities.

In the words of Mr. Gawlik, there is still chance that the transaction will go ahead. Otherwise, the whole of HSW will be merged into Bumar, the state military group.

In May HSW CEO Krzysztof Trofiniak said LiuGong planned major investments at the Stalowa Wola plant, as part of a strategy to expand into tracked equipment and enter the markets of Western Europe, North America, Russia and Commonwealth of Independents States (CIS). The investment programme was said to be worth several hundred million zlotys over three years.



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