Industry and Trade Minister says state should lend OKD mining company one billion crowns

Industry and Trade Minister Jan Mládek has said that the bankrupt coal mining company OKD should be lent one billion crowns. On Tuesday, the country’s finance minister discussed the figure of 400 million crowns the company would need to keep operating until August.

Jan Mládek, photo: Filip Jandourek

Mr Mládek broke down the potential loan as 400 million for operational costs, 280 million for mining and 320 million as a buffer in case of unexpected expenses. The funds would be released by the State Mining Administration if the Finance Ministry gives the plan the green light. Minister Mládek made clear on Wednesday he will put the idea to Finance Minister Andrej Babiš.

OKD declared bankruptcy at the beginning of May, following a long decline due in large part to plummeting coal prices. Company representatives revealed the firm had debts of more than 17 billion crowns while property assets were valued at less than seven billion. Meanwhile, the company has at least 650 creditors; so far 160 have come forward. Czech Radio reported that the claims put forward so far amount to more than 11 billion crowns.

The largest claim, worth more than 10 billion crowns, Czech Radio reported, was put forward by London’s Citibank representing bond holders. The OKD mining company is owned by New World Resources, in turn owned by the so-called Ad Hoc Group, regarded by Industry and Trade Minister Mládek as the company’s largest creditor.

As it stands, coal is still being mined at OKD facilities; the company counts some 9,800 employees plus provides work for an additional 2,500 as suppliers and some 200 agency workers. The government has expressed its commitment above all to employees at risk of losing their jobs.

Shortly before the company filed for bankruptcy in May, the spokesman for the Ad Hoc Group Roman Pařík called the demise of OKD a “social and economic time bomb” for the region of Moravia-Silesia.