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Sunday 24.09.2017 | Name days: Agris, Agrita
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Latvijas Gāze cuts off gas supply to KVV Liepājas metalurgs

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUKVV Liepājas metalurgs has to prove that it is capable of continuing to function as a successful company, notes Latvian Finance Ministry. Explaining the situation following Latvijas Gāze’s decision to cut off gas supply to the metallurgy company, FM admits that the function of KVV Liepājas metalurgs is impossible without gas supply.

«KVV Liepājas metalurgs has to find a solution to this situation because the agreement in regards to the restructuring of the debt is only possible if the company proves its ability to continue functioning,» – notes the ministry.

On Friday, 19 February, LG 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 are paid.

KVV Liepājas metalurgs was warned about the possibility of gas supply being cut off in advance, because the company had previously missed multiple repayments.

KVV Liepājas metalurgs board member Igor Talanov refuses to comment commercial relations between the two companies.

KVV Liepājas metalurgs has to develop and submit a restructuring plan to the government before 1 March in order to accurately calculate the pay-back schedule and its signing. At the beginning of February, the Latvian government put off making its decision in regards to the signing of the schedule. Instead, the KVV Liepājas metalurgs was given time to prepare its restructuring plan.

KVV Liepājas metalurgs has failed to fulfil the requirements necessary to put off the repayment of the debt left from last year (EUR 2.7 million). In order to recover this amount, the State Treasury has taken the funds the company had provided as a guarantee for compliance with the necessary repayment requirements – a guarantee from Russian Alfa bank, which remained valid until the end of January. This helped recover more than EUR 10 million. With that, the state has recovered one-fifth of the loan once paid back to Italian UniCredit Bank by the state on behalf of the company. The amount recovered by the state is larger than the amount required to be repaid. It also covers this year’s EUR 7.5 million payment. The State Treasury continues talks with the company.

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