Bulgaria’s Intertrust Proposes To Run Insolvent Steel Mill Kremikovtzi

“Today we deposited our letters of intent with the receivers and the Economy Ministry,” the Intertrust majority owner and former Kremikovtzi CEO Valentin Zahariev told a business party marking the 3rd anniversary of Intertrust.

Ana Milenkova, one of the two Kremikovtzi receivers, said earlier on Tuesday that talks to save the debt-ridden communist-era giant are underway, though no formal letter of interest to operate or take over the plant has been submitted. She did not elaborate.

Intertrust has sent four or five offers regarding Kremiovtsi to the Economy Ministry, the Intertrust CEO Roberto Mladenov told reporters on the sidelines of the celebration.

“We expect an invitation [for negotiations],” he said, adding that Intertrust is interested in all Kremikovtzi units which can be restarted.

The debt-ridden mill urgently needs to find an operator which would keep it running during its insolvency procedure and prevent its coke chemical plant from irreversible closure.

Last week, the plant started shutting down its two operating blast furnaces due to lack of raw materials. Most of its units producing iron and steel have already been shut down but they can be restarted in up to a month.

Last month Vorskla Steel, a company controlled by Ukrainian tycoon Konstyantin Zhevago, who earlier expressed interest in acquiring Kremikovtzi, withdrew from its tolling agreement with the mill after partially fulfilling the deal. Kremikovtzi also signed a tolling contract with global steel major ArcelorMittal, which however has never been implemented.

Last Friday Deputy Economy and Energy Minister Nina Radeva said Ukraine's Smart Group, owned by tycoon Rinat Akhmetov, has expressed interest in the plant, whose outstanding debt is estimated at 2.36 billion levs ($1.53 billion/1.21 billion euro).

Kremikovtzi is 71%-owned by Global Steel Holdings Limited (GSHL), a subsidiary of Indian steel maker Ispat Industries. The Bulgarian government owns 25.3% of Kremikovtzi and smaller investors hold the balance.

Zahariev owned 40% of Finmetals Holding group, which in turn owned 71% of Kremikovtsi before selling the majority stake to GSHL in 2005.

Intertrust owns a steel tubes manufacturer in Bulgaria named Inter Pipe. It also owns Bulgaria's second-largest lead and zinc smelter OTZK, a lead and zinc miner, a producer of lead and zinc concentrates and a machine building company.

(1 euro = 1.95583 Bulgarian levs)