WARSAW, Poland — Poland's defense giant PGZ has signed a preliminary contract to buy Naval Shipyard (SMW) from the Polish Treasury, the Defense Ministry said in a statement.

The acquisition is estimated to be worth 224.9 million zloty (U.S. $60.1 million). Based in Gdynia, on the Polish Baltic Sea shore, the shipyard has been in insolvency proceedings since 2011. Its takeover by the state-run group will allow to maintain the operational capacities of the SMW, which specializes in performing vessel upgrades and overhaul contracts.

Polish Deputy Defense Minister Bartosz Kownacki said that after the shipyard's finances are overhauled, it will take part in the "project to build submarines, an undertaking worth 10 billion zloty. This will be followed by other projects that must be implemented … worth hundreds of millions, and perhaps billions of zloty."

Last March, Michal Jach, the chairman of the Polish parliament's National Defense Committee, said that the ministry is expected to decide this year on the supplier of three new submarines for the country's Navy. Three companies have applied to take part in the procurement procedure: France's DCNS, Sweden's Saab and Germany's ThyssenKrupp Marine Systems, but ministry officials have emphasized they expect the selected supplier to closely cooperate with Poland's defense industry on the contract. 

Based in Radom, in central Poland, PGZ consists of more than 60 companies with an aggregate workforce of 17,500. The group's total annual revenues are about 5 billion zloty.