Court declares Metalurgs steelworks insolvent

The Liepāja regional court on Friday ruled the KVV Liepājas metalurgs steelworks insolvent, court representative Inta Kurpa told the press.

The insolvency claim had been filed by G4S Latvia security company and finance firm TGD Līzings. 

According to the plaintiffs, the troubled steelworks owe about €257,000 to both companies.

Previously Uldis Antoņēvičs, the lawyer of KVV Liepājas metalurgs, claimed that the financial services had been paid for fully, while the G4S Latvia company had charged the company too much, seeing as a shipment of scrap metal had been lost under its watch.

The court appointed Guntars Koris to oversee the company's insolvency proceedings.

Liepajas Metalurgs metallurgical plant based in the Liepaja port city in south-western Latvia was previously declared insolvent after it failed to repay a state-guaranteed loan to an Italian bank. The government sold the plant to little-known Ukrainian investors, KVV Group, a firm of scrap metal dealers, in late 2014.

Liepajas Metalurgs was renamed KVV Liepajas Metalurgs and officially re-opened on March 6, 2015, but soon started having problems again.

The company has had difficulties paying its electricity bills and wages to workers. It has also missed the deadline for a €2.7 million payment to the Latvian state, as part of the extremely favorable conditions under which it acquired the plant. The company currently owes about €65m to the state.

The steelworks are currently canned and minimum upkeep is done by 152 employees. At its peak it was the largest employer in the city of Liepāja. Closing the steelworks would deal a blow to the economy of Liepāja, the third-greatest city in Latvia. 

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