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Sunday 18.03.2018 | Name days: Ilona, Adelīna

Velmers: insolvency process means bankruptcy for Liepājas metalurgs

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAn application regarding Liepājas metalurgs’ insolvency process will soon be submitted for court review. Insolvency process means bankruptcy for LM, says the company’s legal protection process administrator Haralds Velmers.

In his interview to Panorāma programme of LTV, Velmers mentioned that “doubts and rumours are shouted here and there after the recent shareholder meeting, and it seems there is no other option left for the administrator.” According to him, there are no conditions that would allow him to prevent it.

Insolvency process will mean nothing short of bankruptcy for LM. “It will mean the end for such an organisation as LM,” – he confirmed.

The administrator plans to sell the plant as one unit, so that it would be possible for LM to restore its function in time: “But it does not mean the end for the company. It can still recover and start anew. As the administrator of this process, I will do all I can in order to have this company sold as a healthy manufacturing, metallurgical company.”

After the submission of this process for court review, this process will need to be officially announced. Creditors will then be required to provide their demands within one month’s time.

It should be added that LM shareholders did not increase the company’s capital by LVL 100 million this Wednesday. The approval of this decision lacked a mere 0.1% of votes. LM officials promise to urge the state to invest in the company.

Wednesday, October 30 was the final day when it was possible for LM to complete the conditions stated in the legal protection plan. It was not done. Therefore, the company’s administrator has begun preparations to submit insolvency application for court review.

BNN had previously reported that Russian Afina Pallada Company’s representative in Latvia Sergei Pisarchuk had told the media that his represented company has decided not to invest any money in LM in the near future.

“We believe LM, which is surrounded by many uncertainties and loud announcements, has ended up in an unenviable situation. The entry of any investor in a “burning house” is usually followed by unpredictable losses,” – the Russian company states in its announcement.

According to Pisarchuk, Afina Pallada had previously stated multiple times verbally and in writing during meetings with LM’s creditors and shareholders that the company is willing to participate in the restoration of LM’s functionality and investment into its business plan.

“We have stated our wish to invest LVL 37 million into LM’s capital in writing, like it is requested by the legal protection plan. We have been preparing to complete the most important part of this plan – invest money in the restoration process of the plant. However, there is still no certainty regarding the appropriate conditions for investors. Many announcements provided to the media by the Board of LM and shareholders contradict expectations of all involved sides – restoration of LM’s functionality, which would secure stability for Liepaja and its residents,” – said the company’s representative.


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