Arcelor Mittal will provide 30 million euros to Kremikovtzi Steel Mill in compliance with its plan for urgent funding, Kremikovtzi announced.

Part of the funds will be used to pay workers' wages and to settle the company's borrowings.

The rest will be used to purchase materials, spare parts etc.

Arcelor Mittal is owned by Lakshmi Mittal, the brother of the current owner – Pramod Mittal.

As you know Arcelor Mittal and the Ukrainian tycoon Konstantin Zhevago are the main bidders for the Bulgarian steel mill.

According to sources, the aggressive ArcelorMittal still has the capability to tilt the scales in its favour. On the other hand, the trade unions of the Balkan country’s biggest steelmaker are supportive of the offer of Mr Zhevago. It’s learnt that Mr Zhevago is interested in joint management control of Kremikovtzi and has offered to pay $90 million in working capital.

ArcelorMittal, on the other hand, wanted full acquisition and promised to chip in nearly $50 million for immediate due payments and salaries, and another $150 million for working capital requirement. It also offered to invest $500 million in the next five years and up to $1.2 billion in 10 years.

There are other conditions attached to the acquisition, too. These include investments of $20 million on ecological issues this year. Also, the new owner is now permitted to take fresh debts from the providers of railways, electricity and gas. Kremikovtzi has a production capacity of 2.2 million tonnes.

Last year, it produced 1.4 million tonnes of steel. Its liability stands at around $1.35 billion. The debt burden and spiralling raw material costs have put pressure on the company’s cash flow. Recently, it failed to pay its 8,000 workers.

Pramod Mittal’s Global Steel Holdings, which acquired a 71% stake in Kremikovtzi three years ago, has put it on the block as it failed to bring in funds for working capital and environmental upgrades. The Bulgarian government has one-fourth ownership of Kremikovtzi. The company accounts for 10% of the country’s exports.