Bulgaria Ailing Steel Mill to Heal in 18 Months

The Kremikovtzi Health Plan seems to be the last chance for saving several thousand of steel workers' jobs in the Bulgarian capital. Photo by BGNES

The new "Kremikovtzi Health Plan" provides that in 18 months the steel mill would increase its production from 25 000 to 120 000 tons.

The news was reported by the mill's assignee in bankruptcy, Tsvetan Bankov, who submitted Monday the health plan with Sofia's City Court.

The plan will become effective immediately after the magistrates' approval. It does not foresee closing any productions. The production will be increased by renovations of the electric furnace.

Bankov said that in the initial stages of the plan's implementation about 2 500 workers will be needed.

On the financial side the plan provides for the capitalization of the company's mounting BGN 1 B debt. Before that Bankov would invite each of the mill's creditors to become a shareholder. Three appraisers will be appointed to assess the amount due to each creditor who has expressed the desire to become shareholder and capitalize the debt. If the creditor is satisfied with the appraisal, they will be included in a list to become part of the mill's health plan.

Bankov said the plan aims at protecting to the maximum the interests of the creditors while making possible for many workers to keep their jobs.

The "Kremikovtzi Health Plan" appears to be the absolute final chance to save the insolvent plant.

If Bankov's plan is not approved, the most likely outcome would be to begin a procedure to finally shut down the steel mill.

During the meeting of the "Kremikovtzi" creditors on June 12, Bankov was given the task to select an appraiser of the company's assets.

The failure to pay the gas bills was the reason to halt gas supply to the mill from "Bulgargaz" triggering the closure of the coke processing plant and the blast furnaces.

In the beginning of June some gas supply was temporarily restored over a scrap contract. Those supplies have been prepaid.

The National Electric Company (NEC) also threatens to cut the electric power supply to the mill.

The termination of gas supply to "Kremikovtzi" was postponed several times over hopes that the Brazilian metallurgy giant CSN would save the mill's coke production. The supply was discontinued on May 15, after negotiations with CSN failed.

 

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!