Ukraine firm wins chance to save Liepaja steelworks

Ukraine’s KVV Group has secured the right to purchase the insolvent metalworking plant Liepājas metalurgs, bankruptcy administrator Haralds Velmers informed the media Tuesday.

As reported, the process was down to two final bidders, both of whom offered a deferred payment structure in the face of doubts whether an expedited term of payments would satisfy the troubled plant’s creditors, including the government.

“We can now receive the maximum sum at which these assets are valued,” he said.

Velmers went on to explain that the €107m income from the deal would be spread amongst all of the creditors, therefore it was not clear if the state would be able to recover all of the €73.59m it paid off for the mothballed steelmaker to Italy’s UniCredit bank last year.

“When the deal is closed we’ll be able to tell if the price covers what creditors are demanding,” he said.

The first security downpayment and pre-contract agreement setting the essential terms of the deal must now be transfered and signed by the close of business on Wednesday.

The insolvency administrator added that the reputations and risks behind the firm have been checked out thoroughly and no problems discerned. He told the press the company employs more than 2000 people in Ukraine.

There is only minimal information available on the internet about KVV Group. Bloomberg agency listings cite the company as being active in the scrap metal sector and having tried to acquire Ukrainian iron forge Istil earlier this year, reported information agency LETA.

Press reports suggest KVV Group is owned by Valery Krishtal and Yevgany or Evgenny Kazmin, Ukrainian nationals.

A Ukrainian-based business expert told LSM: "This is a Crimean-based group of scrap metal traders with collection points across the country, who used to supply most of their scrap to steel plant MMK Ilyich in Mariupol.

"After MMK came under the control of Rinat Akhmetov, they lost this business, and are now looking for a new customer. In 2013 they bought a Donetsk mini-smelter DEMZ from Russian concern Mechel. The main guy is Valery Krishtal and his partner is a former Sevastopol municipal deputy."

KVV stands for 'Krishtal Valery Valeryvich'. The group was formerly known as KVVMPU.

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