Creditors, Syndicates to Save Bulgaria's Lead and Zinc Complex from Bankruptcy

The largest Bulgarian producer of non-ferrous metals, the Lead and Zinc Complex (LZC; OTZK) in the southern city of Kardzhali will not be declared insolvent, syndicate leaders have announced.

The heavily indebted LZC, which has been out of operation in the past four months, will not have the fate of Kremikovtzi, the behemoth steel mill near Sofia, which no longer operates as a result of years of mismanagement.

The creditors and trade unions have agreed to seek a way to fuel the Lead and Zinc Complex in Kardzhali again, local syndicate organizations have announced Monday, as cited by BNR.

What is more, they will be seeking to complete the investment program of the factory through the construction of new facilities, while the workers have agreed to abstain from new protests over their delayed salaries for one more week.

On Tuesday, representatives of the Polish consortium Silesia, who are interested in renting the plant, will pay a visit to it, and on Thursday representatives of the French bank BNP Paribas will follow suit.

A consortium of Polish firms has declared interest in renting the largest Bulgarian producer of non-ferrous metals, the Lead and Zinc Complex (LZC; OTZK) in the southern city of Kardzhali, announced Friday Valentin Nikiforov, Vice President of the Confederation of Independent Bulgarian Syndicates, a major trade union active in the recent crisis with the troubled LZC.

Nikiforov said the Polish consortium, whose participants were not specified, is ready to assume the payment of delayed salaries for the plant's workers, which amount to about BGN 1.4 M.

On April 12, after 40-day protests over delayed salaries, the workers at the Lead and Zinc Complex received some of their money, totaling BGN 500 000, which were distributed on as a result of the sale of another troubled company, the Gorubso-Madan mining firm.

Both the LZC and Gorubso-Madan were part of Intertrust Holding owned by Bulgarian tycoon Valentin Zahariev. However, both have descended into debt, leading to workers' protests, and an intervention by the state arranging the sale of both companies by Intertrust Holding.

Zahariev owes a total of BGN 1.4 M in unpaid salaries to the Lead and Zinc Complex workers, and the payment of the January salaries came after 42-day protests by the plant workers which started in Southern Bulgaria and reach the capital Sofia. Zahariev has raised the needed cash through the sale of the Gorubso mines in the southern town of Madan.

Bulgaria's government has indicated that the LZC in Kardzhali is also for sale, and that there are three bidders – one Bulgarian and two foreign – vying for it. However, Bulgaria's Finance Minister and Deputy PM in charge of the economy Simeon Djankov never specified which the bidders were, with the news about the interest expressed by a Polish consortium first emerging on Friday, April 20.

Initial data indicate that Zahariev's debts already amount to BGN 360 M, and are way beyond the earlier known figure of BGN 320 M.

A total of 519 employees of the Lead and Zinc Complex in Kardzhali, the leading Bulgarian non-ferrous metals producer, had not received salaries for half a year.

In early April, the workers filed personal claims in Court against the owner of the plant, Bulgarian oligarch Valentin Zahariev, who is also know for mismanagement of what used to be the largest steel-maker in Bulgaria, the now bankrupt Kremikovtzi plant near Sofia. They demand the replacement of the entire management, starting with him.

The Lead and Zinc Complex is still owned by Zahariev, the now-former owner of the Gorubso Madan metal mines. Gorubso Madan miners finally received their overdue wages after they had been staging protests for two weeks.

Businessman Nikolay Valkanov has taken over the concession of the Gorubso Madan metal mines from Valentin Zahariev. Valkanov is a former VP of Multigroup, the company of Bulgarian tycoon Iliya Pavlov, who was shot dead in 2003. Valkanov currently owns "Minstroy" and Gorubso Zlatograd, another mining company in Southern Bulgaria, and has a concession of the "Varba" mine.

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