SOFIA (Bulgaria), March 17 (SeeNews) - The chief executive of the world's leading steel maker ArcelorMittal, Lakshmi Mittal, has shown interest in buying Bulgaria's debt-ridden steel mill Kremikovtzi, local media reported on Monday.
Kremikovtzi is majority owned by GSHL, a subsidiary of Indian steel maker Ispat Industries chaired by Indian entrepreneur Pramod Mittal, who also is Kremikovtzi's chairman.
"The brother of Pramod Mittal has expressed interest through his company ArcelorMittal," Standart daily quoted Bulgaria's Economy and Energy Minister Petar Dimitrov as saying. The Bulgarian government owns 25.3% of the steel plant.
Lakshmi Mittal has sent a letter to Bulgaria's Prime Minister Sergei Stanishev, saying hed has a strategic interest in the plant and was ready to upgrade it, the daily reported.
Kremikovtzi urgently needs working capital and investments in technological and ecological upgrades to meet tighter environment protection requirements set by the EU legislation and to prevent closure. Bulgaria joined the EU in January 2007.
The steel mill has failed to secure enough capital to maintain its normal operations and pay debt to creditors, the largest of which are state-run companies. Power grid operator NEK, state railway company BDZ and gas monopoly Bulgargaz all cut their supplies and services to the steel mill to the minimum over unpaid debt earlier this year.
Kremikovtzi resumed normal operations on Saturday. It has never stopped operations although its output had been cut to the minimum recently.
GSHL acquired the owner of 71% of Kremikovtzi, Finmetals Holding, for an undisclosed sum in August 2005. Private individuals hold the balance in Finmetals.
GSHL said last month it expects to lure strategic partners into the company within three months to secure urgently needed working capital and investments. The company has hired U.S. investment bank Merrill Lynch to advise it on options for securing the plant's viability but Pramod Mittal is yet to decide whether he would sell the plant. The steel mill needs up to 140 million euro ($220.9 million) in investments by the end the year.
Kremikovtzi said earlier this month it has received expression of interest in its Business and assets by a number of both strategic and financial investors. Ukrainian billionaire Konstantin Zhevago is the only one who has officially stated his interest. Metinvest of Ukrainian businessman Rinat Akhmetov, United States Steel Corporation, Turkish steel maker Erdemir and Swiss Duferco Group are reportedly also interested in the plant.
Kremikovtzi cut its net loss by 87% to a preliminary 35.9 million levs ($27 million/18.4 million euro) last year, as sales rose by over 50%.
Shares in the steel mill last traded at 18.2 levs at 0941 GMT on Monday, down 11.1% from the previous close.
(1 euro = 1.95583 Bulgarian levs)
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