Kremikovtzi bondholders are seriously concerned about the condition of the steel mill, BTA learned on Tuesday from George Prohasky, representative of the Committee of Bondholders. They hold seven-year bonds worth 325 million issued in 2006.

Despite ongoing negotiations with Brazil's CSN it is obvious that talks with some of the strategic investors showing interest in the company's assets will not be finalized by June when a rehabilitation plan must be available, Prohasky said. "Since we do not want the company wound up, we suggest that the main creditors take up the management, turn the company around and offer it to strategic investors in a better market situation," Prohasky also said.

To this end the bondholders will send an expert group to the steel mill this week to start preparing a turnaround plan. Besides the legal aspects, the key issues are the technological and business parameters of rehabilitation given poor demand and low metal prices in Bulgaria and in the international market. The group will include experts on metallurgical works, financiers and lawyers.

The bondholders expect experts to suggest the key parameters for drawing up a rehabilitation plan in a short time. They suggest that the State in its capacity as creditor draw up an opinion and that the key points of the plan be discussed.

The bondholders hope that natural gas and electricity will continue to be supplied to Kremikovtzi until a decision is made on the scope and key parameters of the turnaround plan. If supplies are cut off, key production facilities will be jeopardized, thus limiting the options for the plant's rehabilitation. The bondholders have sent a letter to Economy and Energy Minister Peter Dimitrov, asking that unpaid bills to gas and electricity suppliers be discussed at the proposed meeting.

The bondholders expect the trade unions to be involved in the drafting of the turnaround plan and the much needed restructuring in order to guarantee the future of the steel mill.

Sofia Mayor Boiko Borissov informed the trade unions at Kremikovtzi that Tuesday's rally in central Sofia was their last permitted by Sofia Municipality. Any future rallies, if requested, will be held in the South Park to avoid daily traffic blocks in downtown Sofia.

Source: BTA