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Merrill Lynch Wants More Time To Find Investor For Kremikovtzi
US investment bank Merrill Lynch, hired to advise the sale of Kremikovtzi steel mill in Bulgaria, has asked several extra weeks before choosing the best candidate, the press service of the Economy and Energy Ministry said on April 4.Bulgarian Economy and Energy Minister Petar Dimitrov met with representatives of the investment bank for a progress update on the process.
Merrill Lynch contacted about 20 steelmakers worldwide, seven of which expressed tentative interest and three entered into intensive talks, the statement reads. A serious bidder is the brother of incumbent majority owner Pramod Mittal – Lakshmi, himself owning the world's largest steelmaker Arcelor Mittal.
Dimitrov made clear that the topmost criterion in the selection of an investor should be immediate investments into Kremikovtzi's steel mill viability plan, which also includes measures to cut down emissions.
Another condition of the ministry is to strike a preliminary agreement within the next few weeks to avert any amassing of debt toward state utilities NEC and Bulgargaz, as well as railways BDZ, for electricity, gas and delieveries of raw materials, respectively.
According to the mill's 2006-2007 viability plan, the company was supposed to invest 47 million leva in environmental projects. Until November 15 last year, however, the investment backlog was almost half that sum - 21 million leva.
Kremikovtzi cannot retract from its viability plan because the European Commission would hardly find this acceptable, the ministry said, without ruling out potential talks with the EU executive body on the potential extension of the plan's implementation. The consultants also said that next week bondholders would refrain from any action that could obstruct the forthcoming sale of the mill.
The bondholders are ready to liquidate the mill's assets unless they find an investor willing to pay out 101 per cent of the bond principal, which is 325 million euro. The ministry, which holds 25 per cent in Kremikovtzi, has staunchly maintained that it would block any mov in that sense.
Sofia city hall, however, considers the steel mill one of the main pollutants of the Bulgarian capital and wants it shut down and the extensive land plot in the eastern suburbs of the city re-developed with office and residential buildings.