Turkish Company Eyes Bulgaria Biggest Steel Mill Kremikovtzi

[bulgarianews]

A Turkish company is interested in acquiring a majority stake in Bulgaria's troubled steelmaker giant Kremikovtzi, the economy and energy minister said.

Minister Petar Dimitrov refused to reveal the name of the potential investor, which demanded that it is kept confidential.

Speaking in parliament, Minister Dimitrov assured that the state will demand that every potential investor guarantee the implementation of the turnaround plan, which aims to upgrade the plant to EU environmental standards, improve productivity, quality and margins.

Indian tycoon Pramod Mital and his Global Steel Holding Limited (GSHL) holds a 71% stake in Bulgaria's biggest steel mill but his share is currently a matter of negotiations for sale.

Four bidders are believed to have declared interest in the sale so far - Ukrainian billionaire Konstantyn Zhevago, US Steel company, Pramod Mital's elderly brother steel magnate Lakshmi Mittal, and Rinat Akhmetov, who is considered to be Ukraine's richest man.

Ukrainian billionaire Konstantyn Zhevago was tipped as the most likely buyer of the majority stake in the mill but following rumours of murky negotiations with the owner Global Steel Holding Limited (GSHL), the sale of the plant, which used to be the metallurgical pride of communist Bulgaria, stalled.

"The anticipated sale of Bulgaria's biggest steel mill Kremikovtzi has been delayed as bond holders must also approve the deal," Economy and Energy Minister Petar Dimitrov explained at the beginning of February.

The EUR 325 M seven-year paper was placed in early 2006 with an annual coupon of 12%.

Turkish steel producer Erdemir declared interest in Kremikovtzi privatisation back in 1998. After conducting a looksee around the plant site, the Turkish investor offered a reasonable price, but the deal failed.

Bulgaria sold 71% stake in Kremikovtzi to the Bulgarian Finmetals Group in 1999 for a token USD 1 along with debts to the state and suppliers standing at USD 420 M.

In mid-2005, Global Steel Holding Ltd. (GSHL) bought Finmetals and took control of the mill, which employs 8,000. The company put forward but failed to implement an ambitious turnaround plan.

GSHL is part of Ispat Industries and is owned by Pramod and Vinod Mittal, younger brothers and competitors of steel magnate Lakshmi Mittal.

The government holds 25.3% of Kremikovtzi and its seal of approval is crucial for inking a sale deal.


Source: http://www.novinite.com/