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Liepājas metalurgs submits legal protection plan to creditors for review

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe Board of Liepājas metalurgs (LM) has prepared the legal protection plan (LPP). On Monday, August 19, it was submitted to the official representative of the company’s creditors club – Prudentia Advisers – and the rest of the creditors.

It is basically the company’s plan to restart production this September. All measures compiled in the plan include the necessary costs, pros/cons comparisons for creditors. It reflects in detail the production and sales figures as well as costs for raw materials, energy etc., as BNN was informed by LM’s press-service.

“WE have stated in the LPP that the mandatory procurement component is to remain the same. We hope Latvia will join the EC in the June 11 approved Action Plan in order to help the industry overcome its problems and set the foundations of its competition in the future. Among other things, the plan of the EC states that the reduction of energy prices for energy consuming industries depends on the member states themselves. LM hopes that this initiative will be heard in Latvia and the government decides to set fair prices,” – said the company’s council Chairman Guntis Vilnitis.

The offer remains to sell LM’s shares in subsidiaries. This would give additional income of a couple of million LVL. LM will also have to refuse its sports sponsoring and infrastructure projects – it is planned to hand over them to the municipality. This will allow LM to save LVL 1.3 million every year. LM will not be able to afford such things in the foreseeable future, as explained by LM.

It will also be necessary to find new owners for LM’s unused real estate property. This will allow LM to save up to LVL 4.3 million per year.

“The approval of LPP is important for the whole of Latvia’s national economy. It is important that 1,700 Liepaja residents continue working so that the state would not lose the credit it took over on behalf of LM from the Italian UniCredit (a total of LVL 51 million). The implementation of LPP will demand devotion from the state, investors, creditors and all other involved parties. It will however help the aforementioned parties retain their investments. LM’s bankruptcy will cost the state more than LVL 100 million. Bankruptcy would also spell catastrophe for Liepaja and the rest of Latvia,” – said Vilnitis.

BNN had previously reported that shareholders of Liepājas metalurgs Sergei Zakharin and Ilya Segal had until Monday, August 19 to hand over their shares to the company’s creditors for LVL 1 each, as revealed by the third shareholder Kirov Lipman.

This condition was presented by the partner of Prudentia Advisers Karlis Krastins during a meeting with the three shareholders yesterday. If this condition is not met, the company’s insolvency process will be initiated, Lipman claims.

“I was not presented with the same condition because I am prepared to invest my own money in the company,” – Lipman said.

He added that he does not believe Zakharin and Segal will complete this request and just give away their shares.

Representatives of the LM creditors club received Prudentia’s legal protection plan on August 13. They are busy reviewing it, as reported by press secretary of State Treasury Eva Dzelme.

“Financial consultants only submitted the plan and presented some of the main features. Creditors have begun reviewing this plan in detail. It is not yet clear whether this edition of the plan will satisfy the creditors,” – Dzelme said.

She added that there will definitely be other meetings with the financial consultant in order to discuss all conditions of the plan.

Ref: 102.109.109.8689


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