Polish Co Silesia Most Likely Savior of Bulgaria's Lead and Zinc Complex

Industry | June 21, 2012, Thursday // 13:20|  views

Pictured: Protesting workers of the Kardzhali Lead and Zinc complex blockade a road over unpaid salaries. Photo by BGNES

Polish consortium Silesia is the most serious bidder for the indebted Lead and Zinc Complex (LZC; OTZK) in Bulgaria's Kardzhali, Bulgarian Economy Minister Delyan Dobrev told reporters.

"At present, Silesia is the company with the most serious intentions towards OTZK in Kardzhali," Dobrev said Thursday, amidst renewed streets protests of the factory's workers, who demand payment of their delayed salaries and a clear future for the company.

The Economy Minister explained that Silesia wants to rent the Lead and Zinc Complex for a certain period of time with the option of purchasing it altogether once that is over.

"However, we must see if the creditors are satisfied with this proposal. This means that Silesia could rent the company for 1.5-3 years, and then buy it," he stated, while stressing once again that the problem with OTZK in Kardzhali is an extremely difficult one to resolve.

"We are trying to cooperate and mediate between the potential investors and the bank creditors in order to find a solution. The bank creditors are interests in getting back the funds they provided, and the potential investors are interested in the company's condition," Dobrev elaborated, as cited by BNR.

The workers of the Lead and Zinc Plant in Kadzhali have not been paid since February 2012, and over 130 of them have left.

On Monday, June 25, a number of them are to file suits against the plant owner, tycoon Valentin Zahariev, with the Confederation of Independent Bulgarian Syndicates (KNSB) promising to provide money for legal counsel.

The largest Bulgarian producer of non-ferrous metals, the Lead and Zinc Complex (LZC; OTZK) in the southern city of Kardzhali has been in trouble for at least several months now, with many fearing that the heavily indebted LZC, which has been out of operation in the past four months, will 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.

On June 1, news emerged that Polish consortium Silesia wants to rent the complex for three years.

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 the Gorubso Madan Mines in the nearby town of 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, some of 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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Tags: Plamen Dimitrov, BNP Paribas, Silesia Consortium, consortium, Polish, Poland, syndicates, Confederation of Bulgarian Independent Syndicates, KNSB, Valentin Nikiforov, Multigroup, Nikolay Valkanov, finance minister, Simeon Djankov, OTZK, protest, rally, Kardzhali, Madan, Gorubso, protest, Lead and Zinc Complex, Delyan Dobrev, concession, Valentin Zahariev, miners, Gorubso, Madan, delayed salaries, KCM 2000, Nikola Dobrev


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