The events of the current week may force Pramod Mittal, the principal owner of the largest Bulgarian steelmaker Kremikovtzi, to sell the loss-incurring mill as soon as possible.
On Wednesday, Sofia City Court fined the owners of Kremikovtzi for failure to fulfill their privatization contract obligations. The fine totals BGN 239.25 million ($180.2 million). The claim against Bulgarian firm Finmetals, which is owned by Indian Global Steel Holding Ltd. which in turn is controlled by Indian tycoon Pramod Mittal, was submitted by the country's State Agency for Post-Privatization. Bulgarian Economy Minister Mr. Petar Dimitrov has stated that no extension will be given to Kremikovtzi for payment of its debts, regardless of the mill's request to delay payments for three months.
In addition, the Bulgarian Deputy Minister of Environment, Mr. Chavdar Georgiev, has warned the mill about an upcoming inspection which will determine whether or not Kremikovtzi is in compliance with environmental standards. "If the results are unsatisfactory, Kremikovtzi's permit for operation might be revoked and this does not depend on who the owner is," Mr. Georgiev stated.
Bulgaria sold a 71 percent stake in Kremikovtzi to Finmetals in 1999. In 2005, Indian Global Steel Holding Ltd. bought Finmetals and took control of the mill.