Sofia City Court has rejected the rescue plan for the bankrupt Bulgarian steelmaker Kremikovtzi presented by the steel mill's administration, citing the refusal of Bulgaria's finance minister to reschedule the company's debt to state-owned companies, a prerequisite before the plan could be presented to creditors. Thus, Kremikovtzi is one step closer to liquidation and asset sale.
At the beginning of November 2009, Bulgarian ministers made it clear that Kremikovtzi would most likely be liquidated, since 80 percent of its creditors have disapproved the action plan to save the steelmaker. Meanwhile, the mill's workers staged numerous rallies calling on the state to approve the recovery plan. Creditors and the Bulgarian government have struggled unsuccessfully for several months to reach agreement on a plan to save the plant, Sofia News Agency said.
As SteelOrbis previously reported, Kremikovtzi was declared insolvent in August 2008. In September last year, the mill's assets were valued at a market price of BGN 837.2 million ($596 million), while their liquidation value was estimated at BGN 662.7 million ($472 million). However, Kremikovtzi's total debt amounts to BGN 1.9 billion (about $1.35 billion) and it is obvious that creditors will not be able to recoup 100 percent of what they are owed.