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Government supports Liepajas Metalurgs sale plans

Feb 11, 2014
From wire reports, RIGA

Government supports Liepajas Metalurgs sale plans
Firms in Europe and Russia are interested in buying Liepajas Metalurgs

The Latvian government has supported a sale strategy for the troubled metallurgical company Liepajas Metalurgs. 

Finance Minister Andris Vilks confirmed an official sale could be organized in the spring whilst it's hoped the company could resume production in the summer.

Vilks added that the company is still attracting interest from international investors in Europe and Russia.

Meanwhile, Liepajas Metalurgs insolvency administrator Haralds Velmers pointed out that he has called a meeting of creditors on Feb. 21, where he intends to make a request to extend the company's sale deadline by another six months - until Aug. 21.

''I will request an extension on the sale deadline to give the company the best chance to be sold for the highest price. I believe that the company's buyer will be clear by July. The sale is being organized in such a way, so that all of the company's creditors will be able to recover their money,'' Velmers said.

The finance minister explained that the international sales offer is being made so that there is competition between potential investors. He added that the steel industry is gradually recovering around the world, as companies are seeing increases in turnover and are returning to profit.

''That is why I believe there will be interest in the company,'' Vilks added.

According to plans, the company's casting and forging facilities, technological equipment, real estate and movable property necessary for the company's operations will be offered to qualified buyers internationally so to raise as much money as possible from the deal.

Selling the property of the company that has not been pledged as security may raise 3.5 million euros without the need to organize an auction, plus another 1 million euros that will be raised by selling assets at auction. Selling the other assets, which the company has set up as security for various loans, is hoped to raise 112.3 million euros.

Velmers presented Liepajas Metalurgs shareholders with the company's sale plan on Jan. 20.

Liepaja Court commenced Liepajas Metalurgs insolvency process on Nov.12 last year.  Velmers was appointed the company's insolvency administrator. Over 1,500 Liepajas Metalurgs workers have been laid off so far.

The company halted production last Spring. In July 2013, the State Treasury repaid from the state budget the principal amount of the loan owed to the Italian bank UniCredit by Liepajas Metalurgs 67 million euros.

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