Bulgaria Steel Mill Rally Calls on Bondholders to Buy Majority Stake

Business » INDUSTRY | November 16, 2009, Monday // 16:40
Bulgaria: Bulgaria Steel Mill Rally Calls on Bondholders to Buy Majority Stake In their Monday protest some 200 workers from the plant gathered in front of the Economy and Energy ministry. Photo by BGNES

Protesting workers from Bulgaria's indebted Kremikovtzi steel mill have demanded that two of the biggest bondholders of the ailing plant acquire a majority stake in it to prevent an imminent shutdown.

In their Monday protest 200 workers from the plant gathered in front of the Economy and Energy ministry, calling on the state-owned gas provider Bulgargaz and the state power utility NEK, two of the major creditors in the plant, to become majority owners.

They also demanded that the state approve the recovery plan and bring to justice those, who have allegedly siphoned the company.

According to the workers, led by the trade unionists from Podkrepa, the adoption of the recovery plan is the only chance for the mill to survive and keep 3000 jobs.

Representatives of the protesters however failed to arrange a meeting with either the Economy and Energy Minister Traycho Traykov or any of his deputies.

The rally comes days after it emerged that the majority of creditors of the troubled steel-maker have rejected the rescue plan for the struggling company, meaning its businesses will be wound up and its assets – offloaded.

Key Bulgarian ministers made it clear last Wednesday that bankrupt steel-making giant Kremikovtzi would most likely be liquidated, since 80% of Kremikovtzi’s creditors have disapproved the action plan to save the steel-maker, presented by the administrator.

The deadline for creditors’ expressions of intent concerning the resuscitation plan expired last Monday, but negotiations have since continued. Creditors and government have struggled unsuccessfully for several months to reach agreement on a plan to salvage the plant.

The sprawling communist-era behemoth near Sofia was declared insolvent in August last year and has suffered huge loss of production.

Workers have yet to receive BGN 56 M in unpaid salaries. Some 3 000 employees have been dismissed or have left the company, with some 3 170 staff still on the books.

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