The deal between Bulgarian debt-saddled steel mill Kremikovtzi and Brazilian mining firm CSN has been hamstrung by a simple commercial dispute, sources familiar with the situation told Dnevnik.

The two sides are in talks over an agreement that would see the steelworks produce coke for CSN. The Brazilian company will finance the purchase and transportation of coking coal, the costs of which would be deducted from the final price it pays for the coke. However, the plant and the Brazilian firm remain locked in stalemate over the coke selling price.

In spite of the dispute, the deal looks to be the best solution for the steelworks and has been backed by Kremikovtzi, CSN and the Government. Such a deal would enable the struggling steelmaker to generate revenue until a recovery plan is launched or the steel mill's ownership changes.

Taking its cue from steelmaking giant ArcelorMittal, which walked out on a deal last year, CSN would not pledge any investment in the bankrupt mill without any guarantees that the company would be handed Kremikovtzi's assets after the insolvency procedures are concluded.

After the court has considered the appeals against the list of creditors drawn up by receiver Tsvetan Bankov, Kremikovtzi’s creditors will meet to decide whether to launch a recovery plan or sell its assets piecemeal.

A thousand Kreimkovtzi workers staged protests in Sofia yesterday calling for the Cabinet to draft a rescue plan even if prospective investors pull out of the talks. Unions urged for a flexible social programme involving retraining of young workers, cutting the retirement age for the older ones and compensating all the rest with 30 monthly salaries.

Source: Dnevnik