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KVV Group considers halting function of KVV Liepājas metalurgs

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUUkrainian KVV Group currently considers halting all work at KVV Liepājas metalurgs and carry out conservation of the production plan if the Cabinet of Ministers does not make a constructive decision on 15 March, notes KVV Group press-secretary Nataliya Napadovska.

The management of KVV Group believes that in a situation when KVV Liepājas metalurgs has been forced to work in a business environment in which the state government’s formal attitude towards the company’s objective problems and constructive dialogue is continuously delayed, it may be necessary to decide on conservation of the production plant in Liepaja.

Napadovska reports that the company has yet to receive any support from the state in 2016. On 21 January, creditors began realizing enforcement rights, which resulted in more than EUR 13 million being transferred to the State Treasury. On top of that, the court has also frozen EUR 300,000 of the company’s funds.

«All this has negatively affected the availability of turnover funds in the company. It has also negatively impacted the company’s business image. All requests submitted by KVV Liepājas metalurgs to prevent the company’s insolvency situation remain unanswered,» – said Napadovska.

She notes that KVV Liepājas metalurgs had suffered losses worth EUR 8 million in 2015. The estimate for losses expected for 2016 is at EUR 5 million.

«In a situation when the crisis continues in the black metallurgy industry and electricity prices are two times higher than the average in Europe, KVV Liepājas metalurgs is unable to carry out steel melting and maintain the function of the steel mill. Such a situation does not make the company’s work sustainable,» – added Napadovska.

On 1 March, KVV Liepājas metalurgs submitted its business restructuring plan to the State Treasury. The government had requested this plan at the beginning of February. This plan details the repayment schedule of KVV Liepājas metalurgs’ debt of EUR 70 million.

On Friday, 19 February, Latvijas Gāze’cut off gas supply to KVV Liepājas metalurgs, as confirmed by LG. This decision was made following the company’s inability to pay off its debts for previous gas supplies.

Because the debt remained unpaid on Thursday, 18 February, KVV Liepājas metalurgs’ total debt kept increasing and continues to increase. In addition, KVV Liepājas metalurgs has not yet signed an agreement in regards to gradual repayment of the debt.

Gas supply will be restored as soon as all debts have been paid.

Ref: 102.109.109.8952


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