Bulgaria Steel Producer Kremikovtzi Signs Deal with Zhevago's Vorskla Steel

Business | July 11, 2008, Friday // 00:00| Views: | Comments: 1
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Bulgaria Steel Producer Kremikovtzi Sings Deal with Zhevago??™s Vorskla Steel: Bulgaria Steel Producer Kremikovtzi Signs Deal with Zhevago's Vorskla Steel 3000 workers blocked the entrances of the administrative building and forced the management of Kremikovtzi to sign a contract with the Ukrainian Vorskla Stee. Photo by Yuliana Nikolova (Sofia Photo Agency)

The troubled Bulgarian steel mill Kremikovtzi signed late Thursday night a contract with the Ukrainian company Vorskla Steel, owned by the tycoon Konstantin Zhevago, from production with materials supplied by the client.

About 11 p.m. the management of the plant renounced its contact of the same type with ArcelorMittal and signed immediately with representatives of the Ukrainian company.

The swift turn of events came after the state owned creditors of the plant - the National Electric Company NEK, the Bulgarian Railway Company BDZ, and the state gas monopoly Bulgargaz reduced drastically their supplies to Kremikovtzi.

This caused violent protests by the workers of the factory as about 3000 of them blocked the entrances of the administrative building forcing the management to accept Zhevago's offer.

The new contract entered into force immediately. It also provides for the immediate payment of the delayed May and June salaries and benefits of the workers.

The trade unions announced they canceled their massive protests planned for next week but were still ready to call a general strike.

The Ukrainian company Vorskla Steel is now committed to providing raw materials for the production of Kremikovtzi and to assume the plant's debts to NEK, BDZ, and Bulgargaz.

According to Zhevago's company, 150 000 tons of raw materials were already delivered at the Bulgarian port of Lom on the Danube and Burgas on the Black Sea.

The work for Vorskla with materials supplied by it is seen as a way of saving the troubled plant, which is owned by the Indian tycoon Pramod Mittal. He is the younger brother of Lakshmi Mittal, whose ArcelorMittal is one of the main bidders for the purchase of 71% of the plant.

The other main bidder Kostantin Zhevago is offering an emergency financial injection of USD 90 M for working capital, plus USD 531 M for capital investments.
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» To the forumComments (1)
CJB - 11 Jul 2008 // 17:23:10

More bizarre goings on. Do the "managers" actually manage anything at Kremikovtsi or are they just puppets of the state and the unions?

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