Sun, Nov 22 2009

Ailing Kremikovtzi may resort to barter

Wed, Feb 04 2009 09:26 CET byDnevnik.bg 391 Views
A tolling agreement or an acquisition of Bulgaria’s debt-ridden steel maker Kremikovtzi may turn out to be an unlikely scenario as suitors fear losses from the tight steel market, sources familiar with the situation told Dnevnik.

Brazilian company CSN is shapping up as the likelier bidder, but for now it appears more likely to offer a barter to convert coal into coke.

According to the downbeatest forecasts, steel demand may continue to be low, putting a downward pressure on prices until well into 2010.

CSN plans to initially feed the steel mill with own ore but has not decided if and when it will resume steel production.

Ukrain’s Smart Group, which is interested in signing a toiling agreement, has not made up its mind on what to do with the produce either.

A representative of the plant’s bondholders said it was high time any of the candidates made some concrete commitments or else gas company Bulgargaz and the Economy Ministry will have a reason to put the breaks on gas flows, which are now feeding the plant’s coke production capacities.

The plant is also processing small amounts of scrap into steel to secure workers’ salaries. The staff have not been paid since December, when they got October’s wages. Dnevnik found out that many of the workers are taking days off to seek exra work and fill in the financial gap.

Source: Dnevnik

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