Bulgaria invites Arcelor Mittal to buy into Kremikovtzi

Bulgaria invites Arcelor Mittal to buy into Kremikovtzi

Bulgarian energy minister Traycho Traykov has invited Indian steelmaking heavyweight Arcelor Mittal to participate in the upcoming auction for the assets of state-run steel behemoth Kremikovtzi.

Traykov has spoken to Arcelor Mittal board member Michel Wurth and Roland Verstappen, the Indian company’s vice president in charge of international affairs, the Ministry of Energy said. Talks were held during Traykov’s visit to Belgium on the occasion of the informal meeting of the EU Competitiveness Council this week. Belgium is home to one of Arcelor’s manufacturing facilities.

Traykov told Arcelor representatives that Bulgaria could ensure a transparent and lawful auction.

In 2008, the Indian company was seeking to acquire Kremikovtzi’s assets after the launch of the insolvency procedure. However, the attempt was thwarted by the Bulgarian government’s failure to hold a swift and transparent process, according to the Indian firm.

Traykov yesterday echoed this opinion, saying the former Stanishev Cabinet “screwed” the agreement with the company owned by Lakshmi Mittal, brother of Pramod Mittal, the last majority owner of the Bulgarian steel maker. He acquired majority interest in the company in 2005.

Kremikovtzi was declared insolvent by a ruling of Sofia City Court in May after a string of aborted attempts to find a new owner. It generated interest from Ukraine’s Vorskla Steel and Indian-Canadian Essar Steel.

Kremikovtzi’s have been valued at BGN 837.2 million by market value and BGN 662.7 million by liquidation value. The company’s debt -- including BGN 36 million owed to Arcelor Mittal secured by Stan 1700 hot-rolling equipment worth around BGN 80 million -- stands at BGN 1.84 billion.