The second auction of the assets owned by bankrupt Bulgarian steel giant Kremikovtzi, scheduled for Friday, November 5, 2010, has failed to draw any bidders, with the result that the Bulgarian government will have to cut its price further.
According to Sofia News Agency, unlike the first closed-bid auction, the second auction involved direct bidding. The starting price was BGN 452,414,008 (about $325.68 million), down by 20 percent over the initial tag at the first tender scheduled for September 13, 2010, which also failed due to lack of prospective buyers.
As no one made an offer on Friday, yet another auction will be held following a reassessment of the company's assets.
According to bankruptcy trustee Tsvetan Bankov, the rail transport network and the electricity and natural gas distribution grids on the site of the plant are its biggest assets and should draw investors once the price is lowered even further. Mr. Bankov attributed the failure of the November 5 auction to what he called "too high a price".
As SteelOrbis previously reported, Kremikovtzi was placed in receivership in 2008, after failing to pay investors holding €325 million ($412 million) in bonds. Following the failure of attempts to sell Kremikovtzi to ArcelorMittal and Ukrainian businessman Konstantin Zhevago, owner of Vorskla Steel Bulgaria, Kremikovtzi was declared bankrupt at the end of May this year and cleared for liquidation in June.