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Decision about Kremikovtsi insolvency to be made by court in two weeks

Date: 31.07.2008

The Sofia District Court announced Tuesday that they would make the decision about the insolvency case of Bulgaria's infamous steel mill Kremikotvsi in 14 days.

During the Court's session one of the lawyers of the side that has requested declaring the mill insolvent stated that Kremikovtsi had debts in the amount of over BGN 1 000 600 000.

In addition, last week Kremikovtsi's shareholders won their case in London and with that the mill's loan of EUR 325 M plus interest becomes immediately due, making Kremikovtsi's total debt over BGN 2 B.

The insolvency claim has been filed with the Court by one of the companies of the Ukrainian businessman Konstatin Zhevago along with several other businesses.

The steel mill on their side have submitted an opinion declaring that the mill was solvent.

Bulgaria's Economy Minister had stated Monday that he was expecting approval of the mill's insolvency by the Court, which will finally make the sale of 71% of the mill to an strategic investor possible.

At the same time the trade unions at the mill have once again declared that they supported the insolvency as the better solution for the future of the mill.

According to trade union representatives the postponing of the insolvency case would lead to the closure of the mill because such postponement would further delay the issuing of a complex environmental permit for Kremikovtsi. The deadline for the permit is October 23.

Another possible solution would be the liquidation of the mill, which will lead to social pressure and unrest as the trade unions believe..

The third possible outcome, which is the one supported by them is declaring insolvency and execution of a rehabilitation plan, offered so far only by the Ukrainian company Vorskla Steel owned by Konstantin Zhevago.

According to the leader of the Podkrepa trade union, the organization had not made any political commitments to participate in national protest actions, as it has been reported by some political circles.

The Indian businessman Lakshmi Mittal and the Ukrainian Konstantin Zhevago have been competing for months with offers to purchase the steel mill.

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