Financial Services, Industry, Latvia, Markets and Companies

Aseradens told LETA after the Cabinet of Ministers meeting on Tuesday that altogether over 130 potential investors had been approached. Six of them had submitted non-binding offers and the government has given the green light to further negotiations.

The economics minister said he was cautiously optimistic about resuming production at the steel plant which was the primary goal of the government.

As reported, the deadline for sale of the assets of insolvent KVV Liepajas Metalurgs has been extended till June 16. The previous deadline was March 16, 2017.

The overall approach to the asset disposal has not changed, and the insolvency administrator still recommends to sell the assets as a whole because only that way it will be possible to resume production at the steel plant.

The Liepaja Court declared KVV Liepajas Metalurgs insolvent on September 16, 2016.

The government in May 2016 rejected the debt restructuring proposals by KVV Group, the Ukrainian owners of KVV Liepajas Metalurgs, saying that the proposals envisaged significant participation of the Latvian state in the metallurgical company without handing over control over the company, tax discounts and other measures that might be interpreted as unlawful state aid.

The government also authorized the Latvian Privatization Agency (LPA) to establish a company, FeLM, to which the State Treasury will assign its claim against KVV Liepajas Metalurgs. The steel plant owes EUR 65 mln to the Latvian state.

Liepajas Metalurgs metallurgical plant based in the Liepaja port city in south-western Latvia was first declared insolvent after it failed to repay a state-guaranteed loan to an Italian bank. The government sold the plant to Ukrainian investors, KVVGroup, in late 2014.

Liepajas Metalurgs was renamed KVV Liepajas Metalurgs and officially re-opened on March 6, 2015, but soon started having problems again. The company had difficulties paying its electricity bills and wages to workers. It also missed the deadline for a EUR 2.7 mln payment to the Latvian state, an installment for purchase of the steel plant.