Kremikovtzi Headed To Liquidation

The last still operating facilities of the Kremikovtzi metal plant are to be closed as well, and the enterprise will head towards liquidation, it became clear from statements of the ministers of economy, finance, and environment after the weekly session of the Council of Ministers. Today was the deadline by which Assignee in Bankruptcy Tzvetan Bankov waited for creditors’ statements on the healing plan proposed, envisaging transformation of the company’s debts into stock and gradual restoration of some of the closed productions. Creditors, who would receive at the debts’ transformation 80% of the shares (bondholders), did not approve of the healing plan, so the assignee in bankruptcy is to file the decision with court to rule on it, Minister of Economy Traich Traikov explained.

”The most responsible thing we could undertake as a state and persons expected to keep some order in this process, is to carefully consider all acts and steps to be done= for that reason an interdisciplinary team was composed that drafted yesterday an action plan – if Kremikovtzi shall undergo liquidation it should go normally and not ”chaos bursting in Sofia’s area, people to get to the streets, and nobody to know what is being done”, Traikov said.

The plant’s healing plan is illegal in terms of ecology,

Minister of Environment and Waters Nona Karadzhova added. Apart from the document lacking a single line regarding environmental investments in the enterprise, it also envisages reopening of the most polluting productions – blast and coke-chemicals. The previous viability plan for bringing these facilities in compliance with EU standards featured a time extension, but their reopening would be treated as purely new production for which delay cannot be allowed, she explained.

The Ministry of Finance also submitted its statement

disallowing public payments delays, which would lead to a penal procedure of the EU.

The court recognizes receivables for some BGN 2 billion, as the biggest creditor are the bondholders on a loan of EUR 325 million. The proposal of the assignee in bankruptcy was for debts for BGN 944 million to be transformed into shares. The sum did not include state aids for the enterprise but there was an option for state-owned National Electric Company (NEK), Bulgargas, and Bulgarian State Railways to receive shares for their receivables. Yesterday it came out the company has accumulated BGN 17 million in debts to NEK since August.

After lay-offs and some productions closure, the enterprise has now 3,100 employees. Trade unions were quick to threaten with national strike but the decision over it will be made after a meeting of trade unions representatives with Minister Traikov’s team. ”I’d love we’d do everything possible to avoid getting to protests, but people in Bulgaria never take to the streets for no reason, as for a walk – they do for serious reasons. Terem Targovishte is in a process of declaring strike. A similar process is likely to kick off in Sopot, too, as the situation is severely difficult there as well. People have no fault the management used to rob and destroy. This is an industrial area. People have no other livelihood, and quite likely not to receive their wages, thus practically be left with mo means to live, Focus News cited Leader of Podkrepa Trade Union Dr Konstantin Trenchev saying.

The trade union sent a letter to the economy minister, stating it would demand his resignation if the metals combine reaches to liquidation.

”To our great distort we understood from your report for your first 100 days in office that the major achievement of your rule is the intention to liquidate Kremikovtzi. From you we understood we were working with a ”false industrial structure”, 25% of which you represent. The rapid and decisive acts you undertook in the very start of your mandate for restarting the Gorna Arda project where the leading contractor is the company you were procurator with, encouraged us you could treat our company’s fate the same caringly”, the letter of Podkrepa’s structure with the plant reads. Workers’ representatives pointed out the minister was obligated to create conditions for enterprises to overcome the heavy economy crisis and keep jobs, rather than liquidating them and declaring the problem solved this way. ”Your intention to organize honest and transparent funeral for Kremikovtzy would not improve the financial state of the contractor companies to the enterprise. On the contrary – this would lead to problems escalation and they would also soon turn into former ”industrial structures”, the letter also reads.