Potential Liepaja steelworks investor has two weeks to make up mind

An unnamed investor in the insolvent, defunct KVV Liepajas Metalurgs steelworks has been given two weeks to decide on the acquisition of the company, said Latvian Economics Minister Arvils Aseradens on January 4.

Potential investor in the insolvent, defunct KVV Liepajas Metalurgs steelworks has been given two weeks to decide on the acquisition of the company, said Latvian Economics Minister Arvils Aseradens on January 4.

He said that negotiations with the potential investor are still ongoing, but the investor insists on more favorable terms. At the same time, the government is interested in recovering as much as possible from the funds invested in the company in the past.

"The government will not recover all funds," said Aseradens, adding that the exact sum can be revealed after the agreement is concluded.

In his words, the government has given the potential investor two weeks to make the decision. During this time, the investor has to provide all necessary guarantees and transfer the financing. If this is not done in two weeks, the government is ready to make a decision on selling the metallurgy company in parts.

The minister said that several potential investors have voiced interest in the company. "This is the only investor with whom we are in active talks, but interest has been voiced also by other investors," said Aseradens.

In November 2017 Aseradens said that the potential investor expressed a wish to test the steel company's electric arc furnace before making up its mind about buying or not buying KVV Liepajas Metalurgs. But later a representative of the insolvency administrator said that the potential investor had changed his mind about conducting the tests.

As LETA reported earlier, a new company, K-1 Liepaja Metallurgical Plant, has been established in Latvia in September 2017, according to unofficial reports, to take over the insolvent KVV Liepajas Metalurgs steel plant. Israeli citizen Igor Shamis, the sole board member of K-1 Liepaja Metallurgical Plant, was one of the two main bidders for the steel plant three years ago but the Latvian government chose to sell the steelworks to Ukraine's KVV Group.

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

Liepajas Metalurgs was renamed KVV Liepajas Metalurgs and officially re-opened on March 6, 2015, but soon started having problems again and was once more declared insolvent in September 2016.

It was a major employer in Latvia's third-largest city Liepāja. 

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