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Although Latvenergo warned earlier that it may cut KVV Liepajas Metalurgs from electricity supply if the company does not pay its debt by today, the power utility will not go ahead with this measure this week.

Siksnis explained that Latvenergo together with KVV Liepajas Metalurgs are seeking solutions that would allow the metallurgical company to pay off its electricity bills.

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 had informed KVV Liepajas Metalurgs on possible power interruption 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 gas supply agreement 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.