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State forestry company to get €67 million public loan

STATE-RUN forestry company Lesy SR should receive repayable financial assistance of €67 million from the state to help it overcome the economic and financial crisis, according to a document submitted by the Economy Ministry for interdepartmental review.

STATE-RUN forestry company Lesy SR should receive repayable financial assistance of €67 million from the state to help it overcome the economic and financial crisis, according to a document submitted by the Economy Ministry for interdepartmental review.

The money would be released from state assets and Lesy SR would repay it over a period of 10 years, with the first instalment deferred until 2012, the SITA newswire wrote.

“Providing this assistance would enable switching to the required output in cultivation and protection of forests in 2009 and 2010,” states the Economy Ministry, as quoted by SITA.

The need for this activity amounts to €26 million and the company would concurrently secure the jobs of about 2,000 part-time employees. With the state assistance Lesy SR would also be able to carry out proprietary settlement of forest lands costing about €15 million over two years.

“The company also needs to cover the cost of removal of flood damage amounting to €5 million,” reads the document.

The company’s management plans to generate funds for repayment of the state assistance by gradually increasing the price of its wood after the market recovers and by saving costs by internal restructuring.

“Expected growth in the prices of raw wood products gives a guarantee of repayment from increased proceeds from the sale of raw wood starting from 2012,” SITA quoted the ministry as saying.

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