Ukraine's SMART Group has pulled out of the deal for Kremikovtzi steel mill, most likely prompted by the recent slump in the market of metals, Economy and Energy Minister Peter Dimitrov told reporters on Wednesday.

Dimitrov said that the prices of metals are falling, which does nothing to attract investors. However, talks with Brazil's CSN, the second buyer, are still continuing, he also said.

"We highly appreciate your cooperation regarding the potential restructuring of Kremikovtzi," said a letter signed by Smart Holding CEO Alexey Pertin to the Economy and Energy Ministry. "We have reviewed once more the current technical and financial status of the plant, we considered the potential possibilities for its reorganization. Following the analysis, we submitted our best bid to key investors. We invested time and resources to reach to the best possible decision, and, unfortunately, considering the conditions in the enterprise and the deteriorated market, we could not see any possibilities to further improve the bid," the letter adds.

The letter underlined several times the company's gratitude for the Ministry's support. "We highly appreciate the support we have received from the Government', the letter also said.

In August, Kremikovtzi was declared bankrupt, after its debts swelled to 1,700 million leva. In October, production was partially suspended when orders diminished after Ukrainian millionaire Konstantin Zhevago pulled out of the bidding for Kremikovtzi.

Vassil Yanachkov, leader of the Confederation of Independent Trade Unions in Bulgaria (CITUB) chapter at Kremikovtzi told BTA on Wednesday that a new candidate has expressed interest regarding the steel mill and expects an invitation for negotiations. Finprominvest is registered in Finland and involves Western and Russian interests.

The trade unions are not satisfied by the activities of the company management in regards to finding a solution to the crisis, Yahachkov said and added that they have requested a meeting with Dimitrov and hope that it will take place by the week's end.

Later on Wednesday Deputy Economy and Energy Minister Nina Radeva confirmed that the ministry has received a letter of interest by Finprominvest. She added that she is to invite representatives of the company to meet her on Thursday and to declare their intentions in a more concrete way. Radeva said also that she expects to have a meeting with Finprominvest by the end of the week.

Source: BTA