Bondholders Decide on Bankrupt Bulgarian Steel Mill Fate

Business » INDUSTRY | November 9, 2009, Monday // 08:45
Bulgaria: Bondholders Decide on Bankrupt Bulgarian Steel Mill Fate The deadline for bondholders' final decision on the Kremikovtzi recovery plan is November 9, 2009. Photo by BGNES

The deadline for shareholders of the troubled steel-maker Kremikovtzi to make a final decision on the recovery plan proposed by the assignee in bankruptcy expires on November 9.

The bondholders already rejected once, at the end of October, the recovery plan, which calls for converting their claims into equity capital, a change in the terms of the bond contract, which needs the nod of investors holding 75% of the issuance to pass.

A month ago the administrator Tsvetan Bankov invited all creditors to decide on whether they wanted to capitalize the money the factory owns them. According to the replies, the creditors wanted to transform into shares debts totaling BGN 1,6 B.

Should the creditors reject the rescue plan for the struggling company once again, the company businesses will be wound up and its assets – offloaded.

The total debts of Bulgaria’s former largest steel-maker amount to BGN 1,9 B, whereas the market value of all of its assets has been estimated at BGN 837 M.

The creditors of the steel plant include the state-owned gas provider Bulgargaz, the state power utility NEK and the railway operator BDZ.

The sprawling communist-era behemoth near Sofia was declared insolvent in August last year. It is a big source of pollution and urgently needs re-furbishing.

Kremikovtzi, one of Bulgaria's biggest companies, provides jobs for over 5 000 people and its future was a politically sensitive issue ahead of the general elections in the summer.

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