EU – Baltic States, Financial Services, Latvia, Legislation, Markets and Companies, Mergers and take-overs

Guntars Koris, the insolvency administrator of KVV Liepajas Metalurgs, said that Smart Stahl GmbH had won the auction by offering EUR 1.57 million (VAT excluded) or EUR 1.9 million (VAT included). The Austrian company has to pay for its purchase on March 21.

Koris said that altogether three bidders had participated in the auction. The two other bidders were Latvian companies - Tolmets and FeLM.

The starting price at the auction was EUR 1.33 million.

Latvia’s public media website lsm.lv reported, citing regional TV Kurzeme, that the Austrian company plans to relaunch production at the rolling mill and rehire part of the former employees of KVV Liepajas Metalurgs. Smart Stahl Gmbh manager Peter Foltin was unable to tell to TV Kurzeme how many people could be provided with jobs at the relaunched rolling mill. The building of the rolling mill has been pledged as collateral and will be let out or sold separately.

According to the Austrian business information website firmenabc.at, Smart Stahl GmbH was founded in April 2017 and has a share capital of EUR 35,000. It is fully owned by the Cyprus-registered Segoa Ventures Limited. Smart Stahl Gmbh has been described as a holding doing business in steel making, trade, management and IT services.

As reported, the assets of Latvia's insolvent steel company KVV Liepajas Metalurgs will be auctioned off. The company's insolvency administrator said the decision had been taken because none of the company's potential investors had met the requirements set by the secured creditors or provided the required guarantees that would prove their ability to acquire KVV Liepajas Metalurgs in one piece and relaunch its operations.

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.