Baltic States – CIS, Financial Services, Latvia, Legislation, Markets and Companies, Metals Market

"The EUR 4.4 million increase in the government's claim to KVV Liepajas Metalurgs, from EUR 61.869 million to EUR 66.273 million, is a striking example what KVV Group actually received from the Latvian government. The incomprehensible additional financial burden, which has been put on the company instead of providing the requested assistance, demonstrates how public officials' deeds differ from thier words in which they have voiced readiness to protect the Latvian industry and jobs," the company's representatives said.

The KVV Liepajas Metalurgs management was not officially informed that the Latvian Finance Ministry has ceded its claims to the steep company, said KVV Liepajas Metalurgs board member Igor Talanov. He said that the company's management learned this news from the media.

The decision to increase the claim to KVV Liepajas Metalurgs was taken after consulting Deloitte Latvia, the company's representatives said.

With such decisions, the government not only drives the company deeper into debt, but also does not leave any hope to resume operations, Talanov said.

The Treasy has concluded the cession agreement with FeLM, a subsidiary of the Privatization Agency, which has been established in line with the government's decision to allow Privatization Agency to set up a company specifically tasked with managing the KVV Liepajas Metalurgs debt to the Latvian state. The decision was based on recommendations provided by Deloitte Latvia.

KVV Group, which acquired Liepajas Metalurgs under an agreement signed on October 2, 2014, is supposed to pay for the plant EUR 107 million in several installments over the next 10 years.