Bulgarian Govt Buys 25,000 T Steel from Insolvent Kremikovtzi To Guarantee Payments to Plant's Workers - Media

Kremikovtzi workers have been holding a series of protests in Sofia this week urging the government to act fast to save the plant from closing down its iron and steel producing facilities for good. The plant is urgently seeking an operator that would supply raw materials and keep it running during its insolvency procedure.

The government, which owns 25.3% of the insolvent mill and is its largest creditor, bought the steel products through its State Reserve and War-time Stocks agency. The money will be paid in tranches and the payment of salaries will take at least 15 days, 24 Chasa said.

So far, only Bulgarian metals group Intertrust Holding, majority owned by former Kremikovtzi CEO Valentin Zahariev, has filed a proposal to the Economy Ministry to take over the ailing plant. Trade unions in Kremikovtzi,  however, are reluctant to allow Intertrust Holding to enter the plant, saying the plant's previous management under Zahariev has posted negative results.

Trade unions hope that Ukraine-based Smart Group will also bid for the plant. Smart Group, however, is requiring guarantees from the Bulgarian government for the urgent investments it has to make in Kremikovtzi, 24 Hours reported.

Most capacities at the plant have already been shut down but they can be restarted if supplies of raw material start to arrive. Some 1,200 out of Kremikovtzi's workforce of around 5,000 could lose their jobs after the idled capacities are closed down for good, Economy Minister Petar Dimitrov said earlier.

Closing down Bulgaria's biggest steelmaker, once the pride of Communist-era centralised economy, is likely to affect another 90,000 lievlihoods it supports.

A Sofia court declared Kremikovtzi insolvent in August over an outstanding debt of 1.7 billion levs. The majority stake in Kremikovtzi, 71%, is held by GSHL, a subsidiary of Indian steel maker Ispat Industries.

Kremikovtzi's shares traded unchanged at 1.0 lev on the Bulgarian Stock Exchange by 1200 (1000 GMT) on Thursday in turnover of 380 stocks.

(1 euro = 1.95583 Bulgarian levs)