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KVV Liepājas metalurgs requests postponing payment of EUR 2.7 million to State Treasury

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUKVV Liepājas metalurgs will not carry out the payment of EUR 2.7 million to Latvian State Treasury on 28 December. Instead the company requests postponing this payment for two years, said KVV Liepājas metalurgs board member Igor Talanov.

«We requested postponing this payment one month ago. Since then, we have been coordinating this request. In exchange, the State Treasury has requested out business plan until 2030. We have provided them with all the necessary documents and the decision has been coordinated with creditors,» – said Talanov.

He said the Finance Ministry and State Treasury have yet to provide a confirmatory response in regards to postponing the aforementioned payment. Nevertheless, he hopes a compromise will be achieved.

Talanov emphasized that the company has finances in order to carry out the payment. However, he added that postponing the payment will not result in the state losing any money.

KVV Liepājas metalurgs is prepared to double production output. The company also hopes electricity prices will also be reduced. Because of electricity prices, the company’s losses will reach EUR 6 million this year, admits Talanov.

«These losses are because of the high electricity price in August. Currently we have to pay EUR 90/MWh. Such a price on electricity does not make production cost-effective. We believe there is room to consider price reduction,» – said Talanov.

The head of the company said for companies in the EU electricity price forms 11-13% of production costs. For KVV Liepājas metalurgs, on the other hand, they form 38%.

The company has paid EUR 1.2 million in advance payments for mandatory procurement component. Next year’s estimate is EUR 6 million.

Talanov said the company can potentially work without losses if electricity price dropped to EUR 43/MWh. Working with profit would be possible with a price of EUR 25/MWh.

«The government should listen to us. Unfortunately, the rules in regards to the reduction of mandatory procurement component in summer this year have not yet been approved. With that, we do not have a clear vision for the future,» – explains Talanov.

He adds that financial results of the company have been impacted by the global crisis in black metallurgy.

KVV Liepājas metalurgs’ turnover of 2015 is EUR 73 million. The company has paid EUR 7 million in wages, EUR 4 million for energy resources and EUR 3.5 million for natural gas.

Ref: 102.109.109.2524


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