Polska Grupa Górnicza (PGG) will receive a PLN 1bn liquidity loan from the Polish Development Fund (PFR). The government agreed to grant it on Tuesday.
In the summer of 2020, PGG, affected by the effects of the COVID-19 pandemic, applied for a PLN 1 billion liquidity loan and a PLN 750 million preferential loan under the financial shield of the Polish Development Fund for large companies.
The funds are to be allocated to the current needs of the company, which – according to earlier, unofficial information – closed the previous year with a loss of PLN 2 billion, with significantly reduced year-on-year revenues and coal mining. The company expects to receive funds before April 10.
Let us recall that in February PGG paid the 40,000 crew an annual award, the so-called “fourteenth month bonus”. The payment of the “fourteenth” in full costs Polska Grupa Górnicza over PLN 300 million.
According to the assumptions of the social contract, currently negotiated by representatives of the government and mining unions, PGG’s mines would benefit from subsidies in the future. These would be subsidies to the gradual reduction of mining capacity, ending in 2049 with the closure of the last steam coal mine in Poland. The condition for introducing such a mechanism is the consent of the European Commission.
The Management Board believes that the conclusion of a new agreement with trade unions will not have any financial consequences for the company, as the management board did not consider any changes or reductions in employment. Pursuant to the agreement concluded in May 2011, the employment guarantees for all JSW employees were 10 years.