Shuttered metalworking plant reports size of losses

Take note – story published 9 years ago

Liepajas metalurgs (LM), the bankrupt metalworking plant that was a landmark employer in this western Latvian Baltic seaport, operated last year at a turnover of €311.32m, 3.3 times less than in 2012. Meanwhile, LM’s losses grew several times over to reach €146.6m in 2013, according to Lursoft enterprise registry data.

In 2012 LM operated at a turnover of €434.3m and reported losses of €16m.

LM’s primary manufacturing activities have been at a standstill since the spring of 2013. Shortly prior to its shutdown of work, company owners Sergejs Zaharjins, Iļja Segals and Kirovs Lipmans turned to the government in January 2013 for help with financial troubles, but their request was rejected, citing internal discord among the owners of a private company with less-than-transparent financial statements. LM’s primary manufacturing activities have been at a standstill since the spring of 2013.

In July 2013 the state paid off a €67.4m credit line in LM’s place that had been guaranteed by Italy’s UniCredit bank. Meanwhile the shareholders, contrary to reports of their ongoing efforts, failed to secure additional investors and lost their firm. Over 1000 workers lost their jobs.  

The report by the company’s bankruptcy administrator recalls that legal protection measures began at LM on September 10, 2013, however the measures did not achieve the desired effects. On November 12 LM was declared bankrupt and the search for new investors was launched.

According to the bankruptcy administrator’s plan, first the company’s inventory must be sold off, after which the enterprise can be formally liquidated and stricken from the Enterprise Registry lists. It is hoped that the entire plant and its full inventory will be sold off by September, reports newswire BNS.

The released figures come just days after the binding bids of six investors remaining interested in LM were culled from a list of ten potential buyers, LM bankruptcy administrator Haralds Velmers told LSM Friday. The vetting of the offers to determine the best of the lot is supposed to be complete by August 31. The local government hopes the plant could still see a restart sometime during the fall season.

Meanwhile, LSM spoke to a number of former LM employees Friday, many of whom hope to return to the plant where they spent most of their professional careers should it ever be raised from the mothballs. Only about 400 of the 1,300-strong LM workforce has found new jobs, moreover many of them in third countries.  The State Employment Agency explains that there are still 960 persons listed as formerly-employed with LM in a city that registers about 200 job vacancies daily.  

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