The Bulgarian government has ruled out supporting a proposal for the state-owned gas provider Bulgargaz and the state power utility National Electric Company (NEK), two of the major creditors of insolvent local steel mill Kremikovtzi, to acquire a majority stake in the mill in order to prevent its shutdown, Sofia News Agency has reported.
"Should this scenario unfold, the state-owned companies will have to pay Kremikovtzi's debts while they have no permits for work and also have to pay back public takings to the finance ministry," finance minister Simeon Djankov said at round table talks on Wednesday, which were attended also by trade union representatives. The latter wanted the government to adopt the recovery plan for the company and abandon plans for its liquidation.
After about 80 percent of Kremikovtzi's creditors disapproved of the recovery plan proposed by the mill's administrator Tsvetan Bankov, key Bulgarian ministers made it clear that the bankrupt steelmaker Kremikovtzi - called "a fake industrial entity" by Bulgaria's minister of economy, energy and tourism, Traicho Traikov - would most likely be liquidated.
On Monday over 200 workers from the bankrupt steel mill protested against the government's plan to liquidate Kremikovtzi, calling on Bulgargaz and NEK to become majority owners and to save the steelmaker.
"Shutting down the ailing state-run plant before winding up its businesses and offloading its assets will make the outstanding payments, including social security payments, to the laid-off workers more difficult," the leader of the KNSB trade union, Zhelyazko Hristov, said.
As SteelOrbis previously reported, Kremikovtzi's workers are awaiting delayed salaries and social security payments, which are reported to total BGN 56 million ($42.6 million). About 3,000 employees have been dismissed or have left the company, while about 3,170 workers are still on its books.