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Slovak government announces first expropriation under strategic company law

The Slovak government has named Novácke chemické závody (NChZ), a bankrupt chemicals firm, as the first company which it intends to take over under the terms of the controversial new Act on Strategic Enterprises.

The Slovak government has named Novácke chemické závody (NChZ), a bankrupt chemicals firm, as the first company which it intends to take over under the terms of the controversial new Act on Strategic Enterprises.

The law gives the state the pre-emptive right to acquire companies in financial difficulty which it deems ‘strategic’.

"The loss of more than 1,700 jobs directly in this company is imminent. And there is a danger that this will cause a chain reaction of more layoffs in companies in Slovakia supplying NChZ, and that almost 5,000 more jobs could be lost," the government announced, as quoted by the Sme news website.

Slovak Economy Minister Ľubomír Jahnátek said they would inform the bankruptcy assets administrator about the listing of NChZ as a strategic company, and that creditors would decide how the bankruptcy proceedings would continue. “Only after the final price has been set by the market will the state try to buy these assets,” Jahnátek said.

NChZ’s bankruptcy followed a €19.6-million fine levied on the firm by the European Commission for operating a cartel in chemicals with other companies between 2004 and 2007. The firm’s management have described the fine as inappropriate and liquidatory. In total, nine companies were fined more than €61 million.

The law on strategic companies has been criticised by opposition parties, businesses, and investors alike, the Sme website wrote.

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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