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Saturday 01.10.2016 | Name days: Lāsma, Zanda, Zandis
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KVV Liepājas metalurgs declared insolvent

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn Friday, 16 September, Liepaja court declared KVV Liepājas metalurgs, as confirmed by Liepaja Court chairman’s assistant Inta Kurpa.

Guntars Koris has been appointed as the company’s insolvency administrator. The insolvency case was launched based on the request from G4S Latvia. The second plaintiff in this case was TKB Lizings. As confirmed by the court’s representative, the two separate cases have been combined into one civil process.

On 30 June, Liepaja Court decided to launch legal protection process for KVV Liepājas metalurgs. However, company failed to provide a legal protection plan to the court before the deadline – end of August. Because of that, the court decided to end the legal protection process and restore litigation in the insolvency case.

On 22 March, the government decided to permit the Privatization Agency to found an association that would manage the State Treasury’s plea against KVV Liepājas metalurgs. The cession contract provides that the enforcement of the state claim against KVV Liepājas metalurgs with all associated side claims will be ceded. This solution was supported based on the recommendation of Deloitte Latvia.

FeLM will gradually secure the recovery of state funds.

The Latvian state had previously provided KVV Liepājas metalurgs with a guarantee for LVL 70 million (approximately 100 million). The company’s debt before the state is EUR 65 million. In addition, Liepājas metalurgs has not carried out yet another payment to the state.

The report prepared by Privatization Agency and FeLM in cooperation with economy and finance ministries on the situation with the restructuring of KVV Liepājas metalurgs’ debt was viewed by the Cabinet of Ministers on 17 and 24 May. The government was informed that KVV Group’s proposed methods for restructuring the debt are unacceptable and that it is necessary to find other solutions to restore work of the plant. Proposals voiced by KVV Group provided for major involvement from the state, tax discounts and other activities that were ultimately declared unacceptable by the government.

The government was also informed that KVV Group would not be able to secure the completion of its own conservation plan for KVV Liepājas metalurgs, as it would require major investments KVV Group is unable to afford at the moment.

Ukrainian KVV Group has announced its plans to submit an official complaint against Latvia to the European Commission’s Anti-Monopoly and Corruption Prevention Committee, which could lead to a fine of EUR 150-300 million for Latvia.

Ref: 102.109.109.6092


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