Ukrainian firm Gdansk shipyard bid approved

Poland's competition regulator has approved a Ukrainian firm's bid to buy the Gdansk shipyards, birthplace of the pro-democracy Solidarity trade union, which was threatened with bankruptcy by a European Union demand to cut capacity or repay aid.

The competition office said the bid by the Industrial Union of Donbas would not unfairly skew the market in favour of the company, which reportedly plans both to maintain operations on all three of Gdansk's slipways and refund subsidies to Brussels.

The EU had rejected Polish plans to restructure the yard and demanded it close two slipways to cut capacity or repay funds Brussels said were used to prop up the ailing enterprise.

The yard could have gone bankrupt if forced to repay aid that the EU says amounts to some €1.3 billion, a sum that Warsaw disputes.

Hundreds of the shipyard's 3,000 or so workers rallied last month over fears that Poland's new ruling party, Civic Platform, would re-examine the Gdansk privatisation over suspicions that the outgoing government had not conducted the deal transparently.

Civic Platform officials insist that they want to sell the yard, but the deal still faces another major hurdle.

Poland's Industrial Development Agency has yet to approve the sale, and is reportedly concerned about a decision by the director of the shipyard to allow Donbas to defer payment of three-quarters of the agreed purchase price until 2008.

"Either Donbas will pay now, or give us guarantees that the money will be paid next year," development agency spokeswoman Roma Sarzynska told Polish media, amid reports that the firm wanted to take over the yard this month having paid only one-quarter of the expected 400 million zloty (€110 million).

Many Poles still care deeply for the fate of the shipyard, where Lech Walesa and colleagues founded Solidarity in 1980 as the first free trade union in the communist bloc.

Mr Walesa has criticised the planned sale of the yard, which thrived during communism but has suffered falling orders and dwindling investment under capitalism.