Financial Services, Latvia, Legislation, Markets and Companies, Metals Market

The insolvency administrator’s spokesman Dzintars Hmielevskis told LETA that the decision has been taken because none of the company’s potential investors had met the requirements set by the company’s secured creditors or provided the required guarantees that would prove their ability to acquire KVV Liepajas Metalurgs in one piece and relaunch its operations.

The administrator will now amend the company’s sell-off plan in accordance with the provisions laid out in the Insolvency Law.

Hmielevskis told LETA that the company’s assets would be sold off in parts at several auctions. “A plan for the assets’ sell-off will be worked out in the next coming weeks and the auctions might start already in February. It is not clear yet which parts of the company will be offered at each of the auctions, so the starting prices are not known either,” Hmelievskis said.

As reported, on January 4, the Latvian government gave the potential investor two weeks to to make up his mind regarding the acquisition of KVV Liepajas Metalurgs.

Latvian Economics Minister Arvils Aseradens (Unity) said earlier that several potential investors had been showing interest in the company but no definitive agreement was reached with any of them.

A new company, K-1 Liepaja Metallurgical Plant, was established in Latvia in September 2017, according to unofficial reports, to take over the insolvent KVV Liepajas Metalurgs steel plant. Israeli citizen Igor Shamis, the sole board member of K-1 Liepaja Metallurgical Plant, was one of the two main bidders for the steel plant three years ago but the Latvian government chose to sell the steelworks to Ukraine's KVV Group.

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 and was once more declared insolvent in September 2016.