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Vejonis reproaches Ukrainian investors of KVV Liepajas Metalurgs for resorting to blackmail

BC, Riga, 18.05.2016.Print version
By announcing their intention to turn to the London Court of International Arbitration (LCIA), the Ukrainian investors of the Latvian metallurgy plant KVV Liepajas Metalurgs have resorted to blackmail, Latvian President Raimonds Vejonis said LETA.

He said that Latvia and the investors had signed an agreement containing specific obligations and, should either of the parties to the agreement fail to fulfil its obligations, the other party had the right to complain to the court of arbitration but Latvia had met all its obligations.

 

"The question is about the quality of the investor and compliance with all requirements,” Vejonis said.

 

TV3 commercial television reported that Ukraine’s KVV Group, which had bought the insolvent Latvian steel maker Liepajas Metalurgs, intended to file with the LCIA a EUR 50 million claim against Latvia as they believed that certain information had been kept from them at the time the deal was made.

 

Latvian Economics Minister Arvils Aseradens (Unity) refrained from any detailed comments on the possibility of an investment dispute over Liepajas Metalurgs.

 

KVV Group announced in late March it had been forced to take a decision on the conservation of KVV Liepajas Metalurgs steel plant because the negative factors hampering the company's operations – the crisis in the global metal industry, the company's debts to secured creditors and the Latvian government's reluctance to provide assistance to the industry – were persisting.

 

KVV Liepajas Metalurgs, based in Liepaja port city in south-western Latvia, has been struggling with financial troubles lately. The company has had difficulties paying its electricity bills and wages to workers. It has also missed the deadline for a payment it was supposed to make to the Latvian state for the Liepaja-based plant. 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.






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