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PA: there are risks of losing part of the money invested in KVV Liepājas metalurgs

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUPrivatization Agency has received the restructuring plan from the owners of KVV Liepājas metalurgs. The plan is unacceptable, however, because it includes a request for state support, which also has to be approved by the European Commission, as reported by the agency’s manager Vladimir Loginov.

In his interview to Latvijas Radio, Loginov explained that KVV Liepājas metalurgs owners wish to receive tax benefits, special reduced prices for electricity and other benefits from the state. The majority of requests are unacceptable. This is because they provide for state support, as reported by lsm.lv.

Loginov admits that it is currently unknown when the company will recover and start working again. It will depend on the situation on the market and the current shareholders. If KVV takes no actions to save Metalurgs, insolvency will be unavoidable. How long this situation may remain will depend on creditors as well. They are the ones who will decide how long they can wait until Metalurgs pays back its debts.

Loginov also noted that there are multiple creditors, and debts are gradually becoming larger. There is a possibility that one of the creditors may submit Metalurgs’ insolvency application.

There is also a slight possibility that some different owner may take over the company and make sure metallurgy does not disappear from Latvia.

When asked if it is possible for Latvia to recover its investments from Metalurgs, Loginov said there is a risk that the state could lose a part of its investment. Much will depend on the behaviour of the company’s current owners and the development on the metallurgy market.

Loginov sceptically views the readiness of Metalurgs’ owners to challenge the country in court, because the transaction in which the company was taken over by KVV did not include participation of the Latvian state.

Prime Minister Maris Kucinskis had previously said that it would be in the country’s best interest not to invest more money into Metalurgs.

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