Liepaja steelworks faces shutdown threat

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The prospect of the Liepaja Metalurgs closing its doors and hundreds of workers being laid off loomed closer Thursday the plant's Ukrainian owners threatening a shutdown unless the government helps bail it out of financial ruin.

Ukraine's KVV Group is evaluating the possibility of suspending the operations of joint-stock metallurgical company KVV Liepajas Metalurgs if the Cabinet of Ministers does not make any "constructive decisions" during a crucial March 15 meeting, the KVV Group told LETA.

The management of KVV Group is unhappy at the government's reluctance to help it pay off huge debts, including a massive outstanding electricity bill.

KVV, which hails from Ukraine's Crimea and was previously involved in the scrap metal sector before it was named as a buyer for Metalurgs in 2014 for a price of €107 million.

However, hopes the little-known new owners could turn around the fortunes of the plant which had been in decline for years have proven to be in vain.

KVV Liepajas Metalurgs last week submitted a restructuring plan to the State Treasury, which the government had requested at the beginning of February.

Now, the documents submitted by the company will be evaluated by specialists from the State Treasury in cooperation with experts from audit company Deloitte Latvia.

After this, the State Treasury will give its conclusions regarding the submitted plan, which will then most likely be reviewed by the government to make a decision on whether or not to support it.

LETA also reported, Treasury head Kaspars Abolins said after the Cabinet meeting on February 2 that KVV Liepajas Metalurgs had to produce a restructuring plan by March 1 in order to to continue the talks about debt rescheduling.

KVV Liepajas Metalurgs missed a payment of €2.7 million that was due to the Latvian state in late 2015 and tried to negotiate an extension of the payment deadline but failed to meet the conditions set by the government for debt rescheduling.

The factory is a major employer in Latvia's third-largest city, so the fate f the plant has significant political implications.

Workers at the plant, many of whom only regained their jobs in recent months after previous layoffs, told LTV they again feared for their futures. 

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