Secured creditors of the metallurgical company Liepajas Metalurgs are prepared to further invest in the company’s maintenance during the insolvency process, reports LETA.
Although no agreements have been signed as of yet, the creditors are ready in principle to provide the necessary funding. The creditors have also confirmed that they are prepared to make advance payments for the company’s maintenance during the winter period, the State Treasury’s head, Kaspars Abolins, said.
He added that secured creditors are prepared to cover the cost of Liepajas Metalurgs’ sale process. Prime Minister Valdis Dombrovskis said after the government’s meeting on Tuesday that state entities that had loaned money to Liepajas Metalurgs were recommended not to sell the company’s assets, but assist in the sale of the company so it could find an investor and resume operations.
Haralds Velmers, Liepajas Metalurgs’ insolvency administrator, said that the company’s maintenance cost, which amount to an estimated 500,000 lats (714,280 euros) a month in electricity and gas bills, plus approximately 200,000 lats a month to pay wages to the remaining staff are necessary to continue the company’s technological processes.
Velmers said he had not yet been able to meet with representatives of Latvijas Gaze gas supply company, an unsecured creditor of Liepajas Metalurgs. “Continuous gas supply for the company is very important, but I hope that Latvijas Gaze, seeing that the secured creditors are involved in maintenance of the company, will also be forthcoming,” added Velmers.
Meanwhile, Russian company Afina Pallada has renewed talks about possible acquisition of the insolvent company. “We are interested in acquisition of Liepajas Metalurgs, because what previously obstructed our investments in the company is now gone. We are prepared to buy Liepajas Metalurgs and renew production,” an Afina Pallada spokesman said.
Liepaja Court commenced Liepajas Metalurgs insolvency process on Nov.12. During the next two months, stock-taking will take place and an assessment of the company will be performed, based on the results of which a sales plan for the company will be drawn up.
“My task is to separate the metallurgical company from all other functions not associated with its main business, therefore making it more attractive for potential investors. This will be a moment of truth, because investors will be able to buy a company and be sure that they will encounter no surprises in the company’s balance sheet,” said Velmers.
Asked to comment on the price of the company, Velmers said he could not name one yet. The company’s value will be determined after the assessment, he said, adding that 30 million lats should be invested in the company’s current assets so it could resume production. The company’s creditors are expected to submit their claims within one month, which is when the company’s total amount of liabilities will be clear. From what information is available, the company’s debts could be around 130 million lats, said Velmers.
He also said he did not yet know at the moment how exactly the company would be sold, at auction or otherwise.