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Bulgaria - Kremikovtzi Steel assets sold to Eltrade in the fourth auction

Bloomberg reported that Bulgaria sold the production assets of the bankrupt Kremikovtzi AD steel mill in a fourth auction after cutting their initial price by 44% to BGL 316 million.

Mr Tsvetan Bankov, the factory’s receiver, told reporters in Sofia that the mill was sold to Eltrade Company EOOD. Eltrade paid a BGL 31 million deposit before the auction and pay the balance of the full price by April 18th 2011.

Mr Bankov said that the plant’s remaining assets, valued at about BGL 300 million, which include some 300 service apartments, lands and mines, are being sold at separate auctions.

The production assets, which also include a rail transport network and the electricity and natural gas distribution grids serving the plant, were initially priced at BGL 565.42 million in the first auction on September 13th 2010.

According to Bulgaria's Trade Registry, Eltrade was registered as a metals trading firm in Sofia on March 8th 2011 with capital of BGL 20,000. The company’s founder, Mr Lachezar Varnadjiev declined to comment on how he is going to develop the assets.

Mr Krassen Stanchev CEO of the KC2 consultancy firm and a former adviser for some of the bondholders said that "This is good news for all involved. If properly managed, Kremikovtzi can generate net income of some EUR 320 million a year for the next four years by processing scrap."

The mill was placed in receivership in 2008 after failing to pay investors holding EUR 325 million of bonds. Attempts to sell it to ArcelorMittal and Ukrainian billionaire Mr Konstantin Zhevago three years ago failed, prompting the Sofia City Court to declare it bankrupt.

The plant, built in the 1960s, shut coke and metals output in May 2009. It was previously owned by Mr Pramod Mittal, the younger brother of ArcelorMittal CEO Mr LN Mittal.

Source: bloomberg.net

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