Court declines request to declare steelworks insolvent

Take note – story published 8 years ago

The Liepāja court today turned down the request by Elme Messer Metalurgs to declare the KVV Liepājas metalurgs steelworks insolvent, reported LETA agency Tuesday.

Elme Messer Metalurgs turned to the court over a debt for a gas delivery, filing the request to declare the steelworks insolvent on December 16. 

Previously Elme Messer Metalurgs board member Silvis Fridrihsons said that he couldn't disclose the volume of deliveries or the period for which the debt was accrued as it was a trade secret. The company provided the steelworks with industrial grade oxygen.

On November 12, 2013, the court declared Liepajas Metalurgs insolvent. The company ran into financial troubles and had to cease production in spring 2013 due to a shortage of working capital.

Liepajas Metalurgs could not repay a state-guaranteed loan it had taken from an Italian bank, and the loan was repaid by the Latvian state. Liepajas Metalurgs was placed under legal protection but all negotiations about rescuing the company and bringing in a new investor failed and the company’s administrator filed for insolvency. 

On October 2, 2014 the steelworks were sold to Ukrainian KVV Group. At one point the company employed 960 people. The company cut down production on May, citing high cost of electricity, in particular the large amounts payable for the mandatory purchase component (MPC or a component of the electricity price supporting production of renewable energy). This left some 600 workers in the company, where only 400 work now. 

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