Sofia News Agency (novinite.com) has reported that Bulgaria's National Electric Company NEK and the Bulgarian Energy Holding (BEH) intend to cut off electricity supplies to local insolvent steel mill Kremikovtzi, if no funds can be found to pay off the mill's debts.
"The decision for that depends solely on the creditors of the factory," Bulgarian Energy and Economy Minister Petar Dimitrov stated.
In addition, Mr. Dimitrov said that he had appealed to Kremikovtzi's creditors to prop up the plant financially, but that only the Bulgarian state had provided any financial support for the mill so far.
According to Mr. Dimitrov, if the working group which is currently analyzing the situation of Kremikovtzi does not come up with a constructive plan to save the steelmaker, the mill will have to be liquidated and its remaining assets will be sold in a bid to pay off creditors.
As SteelOrbis previously reported, in August 2008 Sofia District Court declared the Kremikovtzi insolvent, after it had amassed about BGN 2.37 billion ($1.64 billion) in debts, of which half was owed to the government and the state-owned electricity, gas and railway companies. On May 15, the Bulgarian state-owned gas distributor Bulgargaz suspended its gas supplies to the mill.
Kremikovtzi has already laid off about 1,500 workers this year and over 3,500 more jobs are now at risk.
With an annual production capacity of 1.4 million mt, Kremikovtzi accounted for two percent of Bulgaria's gross domestic product and accounted for 10 percent of the country's exports to European Union.