Ukraine’s KVV group set to take over major Latvian firm

Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for 107 million euros ($138 million), the insolvency administrator said on Tuesday.

Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries, filed for bankruptcy last year, blaming weak demand in Europe, Reuters reports.

The KVV Group has provided a clear plan for re-launching the plant's operations, the insolvency administrator Haralds Velmers said in a statement.

KVV Group is going to pay the sum over 10 years.

Latvia's government, which had to repay 74 million euros under a loan guarantee to Italian bank UniCredit after the company could not cover its liabilities, has welcomed the offer.

"It's important that (the buyer) wants to invest in the company and to resume production," Latvia's Prime Minister Laimdota Straujuma told reporters.

Liepajas Metalurgs was the biggest industrial company in the Baltic state of 2 million before its bankruptcy.

Russian millionaire Igor Shamis and his Luxembourg-based United Group says he offered to purchase the insolvent Latvian metallurgical company ''Liepajas metalurgs'' for 120 million euros

Shamis said that the first payment of EUR 16 million was to be made right after the agreement was signed, with the rest of the purchase amount paid within 10 years. He also claims that the payment had 100% European financial institution guarantees.

''I respect the decision made by Latvia and the company's insolvency administrator. However, I do not see myself as losing this tender. As I am informed, an agreement on the sale of ''Liepajas metalurgs'' has not yet been signed. Until it is signed, there is always hope that the situation could change," said Shamis.

My intuition says that the situation could change."