Piecemeal Sale of Bulgaria's Largest Non-Ferrous Plant Kicks OffIndustry | August 13, 2012, Monday // 09:36| views
Bulgaria's largest non-ferrous metal plant is to be sold piece by piece after a total management collapse. Photo by BGNES
Bidders wishing to purchase certain assets of Bulgaria's bankrupted largest non-ferrous metal producer, the Lead and Zinc Complex (LZC, OTZK) in Kardzhali, have a month do so, as of Monday, August 13, 2012.
This is possible after a private judicial enforcer listed for sale 50% of severely financially troubled largest non-ferrous metal works, the Lead and Zinc Complex.
The sale surfaced Saturday on the website of private enforser Rosen Sirakov.
The enforcer has taken up the measure after OTZK's main creditor, Bulgarian First Investment Bank won a court case against the factory and obtained a court order.
The Lead and Zinc Complex owner Valentin Zahariev has been chronically failing to surface his loan from FIB, which has led to the present developments.
According to the private enforcer's listing, the assets for sale, covering an area of 326,230 sq.m., have an initial price of a bit over BGN 8.3 M.
Anonymous sources quoted by the BGNES information agency have said that the amount will cover only a fraction of the FIB credit.
They have also explained that should the assests fail to be bought, the bank will acquire a right to them, but only insofar as it can revitalize the metal factory to get back its loan.
Zahariev's mismanagement of OTZK has caused a major business and social mishap in Bulgaria, after the owner failed for months to pay the factory workers' wages.
Many employees have chosen to terminate their contracts with the Complex, some filing lawsuits against it.
Many fear that the developments of the past months are spelling the death throes of Bulgaria's once prosperous largest non-ferrous metal works.
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.
In the spring and summer of 2012, there was an attempt to find an investor to save the factory with Polish consortium Silesia emerging as a candidate to rent the complex for three years.
On April 12, 2012 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 owed 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 raised the needed cash through the sale of the Gorubso mines in the southern town of Madan.
Back then there was data 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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