Troubled steelworks posts another huge loss

The Liepājas metalurgs steel-making plant posted losses worth 21.45 million euros last year, which is 46.3% more than it reported to have lost in 2013, according to the financial declarations of the firm in the Lursoft business database, reported newswire BNS Monday.

The company’s turnover shrank to just 732,300 euros during the same period.

The plant recently resumed production as KVV Liepājas metalurgs after being purchased by Ukrainian investors, who assumed responsibility for the steelmaker’s former owning entity’s creditor claims to the tune of 85.5 million euros. Acounting for all uninsured creditors, Liepājas metalurgs owed 108.37 million euros altogether at the end of last year.

In 2013 Liepājas metalurgs posted 133.32 million euros in turnover and reported losses worth 14.663 million euros.

In October 2014 the KVV Group purchased the plant and began preparing the facility to be fired up again in March. However, on May 19 the plant again announced plans to temporarily lay off part of its newly recruited workforce as production costs were rapidly outrunning the firm’s capacity to maintain its initial production lines.

Meanwhile, BNS reported that the bankruptcy administrator Haralds Velmers, while receiving no remuneration for his work with the mothballed metalurgical mammoth in 2013, received a cool 1.03 million euros in compensation for his role overseeing the insolvency process and resale of the company to KVV Group in 2014, according to Lursoft.

The Law on Insolvency provides for bankruptcy administrators to get 39,341 euros in compensation for selling off bonded debtors’ assets exceeding 1,422,871 euros, however also an additional 1% for sums to be paid out to creditors in excess of 1,422,871 euros.

Liepājas metalurgs was declared insolvent on November 12, 2013 after failing to find investors willing to bail the plant out. However, after securing a deal with the KVV Group, the Ukrainian investors signed an agreement to pay 107 million euros over the course of ten years to acquire the plant’s main production facility. 

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