The assets of Bulgaria’s debt-saddled steel mill Kremikovtzi have been attached a market value of 837.2 million leva, according to a report by Amrita consultancy, which was hired to appraise the company.

But with the plant’s total debt running at 1.9 billion leva, depending on the outcome of a number of court battles, creditors will not be able to cover 100 per cent of their claims.

The assets’ liquidation value has been set at 662.7 million leva, which represents the possible sale proceeds, adjusted by sale costs and other provisions.

The existing assets could be enough to cover between 50 per cent and 30 per cent of the claims but creditors could count on a different percentage depending on class. Creditors with receivables secured by a pledge on assets will be highest on the priority list.

The largest private claim – on the company’s bond issue whose interest has ballooned to 698 million leva - is secured by a pledge.

And Arcelor Mittal, the world’s largest steelmaker, also has a secured claim of 36 million leva.

Sources close to the matter say the collateral covers close to 20-25 per cent of the claims but it all hinges on the proceeds that would be made if the company’s assets do go on the chopping board.

Although it could turn out as Kremikovtzi’s largest creditor once the trail ends on the 695 million leva state aid, the government is the least protected creditor.

Public state claims come in only third on the list after secured claims and claims by the workforce. Thus the government faces joining in the scramble with more than 100 smaller creditors for the leftovers from a possible forced sale of assets.

The report reveals that Kremikovtzi owns a staggering number of assets, some of them non-metallurgical or in wretched condition.

Source: Dnevnik.bg