Bulgaria Starts Third Auction on Bankrupt Steel Mill

Kremikovtzi, one of Bulgaria's biggest companies, provided jobs for over 5 000 people and its future was a politically sensitive issue ahead of the general elections last summer. Photo by BGNES

Bulgaria has regrouped the assets of bankrupt Kremikovtzi steel mill and will auction them for a third time Monday after failing to attract any bidders in two previous auctions.

For Monday's bid, the starting price will be set at BGN 395 M, which is a 31% drop from the initial price.

The plant's remaining assets include some 300 service apartments, lands and mines.

Two prior auctions were held after the plant declared liquidation in May 2010. However, they failed because actually no one turned out to bid for Kremikovtzi, which is considered the pride of communist-era industry in Bulgaria.

The site and assets of the struggling company, built in 1960s, were first offered for sale four months after the behemoth was sent into liquidation, its business – wound up and its assets – offloaded.

Tsvetan Bankov, the factory's receiver, has stated that on Monday, it will become clear whether expectation of creditors of Kremikovtzi will be met. Creditors include companies, employees and large investors.

"They might decide to patiently wait for the next auction when the price, according to the law, will have dropped by 80%," Bankov said.

He said that dozens of investors from Bulgaria and other countries have reviewed the assets. Bankov pointed out that the reviews were made by well-prepared experts, which indicates the real interest by investors towards Kremikovtzi.

In his words, the difference from the previous auctions is that now more lands and buildings are included, while transport assets are excluded.

Kremikovtzi, one of Bulgaria's biggest  companies, provided jobs for over 5 000 people and its future was a politically sensitive issue ahead of the general elections last summer.

Different views about the future of Kremikovtzi site have been recently discussed by the Bulgarian public and authorities, including a possible retainment of the operating mill, creating a museum, a residential neighborhood and a new industrial park.

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