Auction for Bankrupt Bulgarian Steel Mill Fails to Kick Off

The third auction scheduled for the assets of Bulgaria's bankrupt Kremikovtzi steel mill has failed like the previous two, due to the only bidder not presenting a satisfactory document for a having paid the required deposit.

The Victory Commerce company, owned by Georgi Manchev, has presented a copy of an email, according to which the Russian Rosbank has transferred the required EUR 20 280 000 for participation in the auction.

However, Bulgarian Development Bank, which carries out the bankruptcy procedure, has stated in a press release that it has not received a deposit from the company. Georgi Manchev has said Victory Commerce is quitting its bid.

Bulgaria regrouped the assets of bankrupt steel mill giant and tried to auction them for a third time Monday after failing to attract any bidders in two previous auctions. For Monday's unsuccessful bid, the starting price was set at BGN 395 M, which is a 31% drop from the initial price.

The 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 giant 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.

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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