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Deadline for sale of assets of insolvent KVV Liepajas Metalurgs steel plant extended till June 16

BC, Tallinn, 17.03.2017.Print version
The deadline for sale of the assets of insolvent KVV Liepajas Metalurgs, a steel plant based in Liepaja port city in south-western Latvia, has been extended till June 16, Dzintars Hmielevskis, a spokesman for the company's insolvency administrator said LETA/BNS.

"Adjustments have been made to the timetable for sale of the assets, considering the vast efforts required for communication with investors and preparation of information for them," he said, adding that the deadline had been extended from March 16 to June 16.

He said so far several investors had already showed interest in acquiring the steel plant's assets.

The overall approach to the asset disposal has not changed, and the insolvency administrator still recommends to sell the assets as a whole because only that way it will be possible to resume production at the steel plant.

Creditor claims to KVV Liepajas Metalurgs submitted to the insolvency administrator total more than EUR 116.587 mln. The total amount of secured creditor claims is EUR 86.935 mln, and the claims by unsecured creditors add up to EUR 29.652 mln.

As reported, the Liepaja Court declared KVV Liepajas Metalurgs insolvent on September 16, 2016.

The government in May last year rejected the debt restructuring proposals by KVV Group, the Ukrainian owners of KVV Liepajas Metalurgs, saying that the proposals envisaged significant participation of the Latvian state in the metallurgical company without handing over control over the company, tax discounts and other measures that might be interpreted as unlawful state aid.

The government also authorized the Latvian Privatization Agency (LPA) to establish a company, FeLM, to which the State Treasury will assign its claim against KVV Liepajas Metalurgs. The steel plant owes EUR 65 mln to the Latvian state.

Liepajas Metalurgs metallurgical plant based in the Liepaja port city in south-western Latvia was first declared insolvent after it failed to repay a state-guaranteed loan to an Italian bank. The government sold the plant to Ukrainian investors, KVV Group, in late 2014. Liepajas Metalurgs was renamed KVV Liepajas Metalurgs and officially re-opened on March 6, 2015, but soon started having problems again. The company had difficulties paying its electricity bills and wages to workers. It also missed the deadline for a EUR 2.7 mln payment to the Latvian state, an installment for purchase of the steel plant.

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