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The electric company has signed a power supply agreement with KVV Liepajas metalurgs, according to which electricity bills are paid every ten-day period of the month. Latvenergo already earlier has demonstrated understanding when KVV Liepajas metalurgs found it difficult to make payments in due term and asked for extension on the repayment of its outstanding electricity bills.

Since January 20, 2016, KVV Liepajas metalurgs has not paid its electricity bills and its debt has already reached EUR 115,000. A new bill has been prepared for the power consumption in the second ten-day period in January.

Latvenergo has voiced concerns that there is a risk not to receive full payment of the bills and the debt may increase in the future.

Latvenergo has informed KVV Liepajas metalurgs on possible power interrupation on January 28 if the outstanding bills are not paid or an agreement on an acceptable repayment schedule is not reached.

As reported, Elme Messer Metalurgs, a company that had been supplying industrial gas to KVV Liepajas metalurgs steel company, has unilaterally terminated the agreement on supplies of gas because KVV Liepajas metalurgs has not paid any of its monthly bills and has not responded to warnings.

Elme Messer Metalurgs in December 2015 turned to court, demanding to declare insolvency of KVV Liepajas metalurgs, but Liepaja City Court dismissed the insolvency lawsuit.

Under the debt repayment agreement signed between KVV Liepajas metalurgs and the Finance Ministry in 2014, the steel plant was due to make a payment of EUR 2.7 million to the Treasury on December 28, 2015, but has asked the government for a two-year extension of the payment deadline.

KVV Liepajas metalurgs last year posted EUR 73 million in turnover, while the company's loss reached EUR 8 million.

Liepajas Metalurgs metallurgical plant halted production in spring 2013 and was unable to repay a state-guaranteed loan that it had taken from the Italian bank UniCredit. In July 2013, the Treasury paid off the entire loan or EUR 67.465 million from the state budget.

Liepajas Metalurgs was declared insolvent and later sold to Ukrainian investors, KVV Group. Liepajas Metalurgs was renamed KVV Liepajas metalurgs.