ArcelorMittal, the world's biggest steel maker, is prepared to pay between $400 million and $700 million for a majority stake in Bulgaria’s ailing steel mill Kremikovtzi, Dnevnik daily reported, quoting a bondholder of the steel mill.

The exact figure would depend on the amount of hidden debts Kremikovtzi has, the same source, which spoke on condition of anonymity, said. Such obligations would include the costs of the viability and environmental programmes of the steelworks, which the mill has to carry out in order to comply with mandatory European Union environmental regulations. If it does not meet the EU requirements, Kremikovtzi faces closure.

The steel giant is also ready to invest $500-650 million in operating funds and capital expenditures within a five-year period. This investment backlog is set to be sufficient to upgrade the mill to the standards of the steel maker’s other production facilities.

The acquisition price is enough to pay off what the mill owes to bondholders - the full principal of the bond and interest, worth 347 million euro - but not all of Kremikovtzi's other debt, the bondholders’ committee said, as quoted by Dnevnik. Those debts are estimated at an extra $300 million.

None of the would-be buyers, however, is ready to pay the full figure and for this reason negotiations have stalled, the bondholders said.

Konstantin Zhevago, the Ukrainian tycoon, has stated in his letter to Bulgarian Prime Minister Sergei Stanishev that he was ready to immediately pay $100 million to be used as operating funds, but also hinted that he might file insolvency proceedings against the mill.

As previously reported by The Sofia Echo, such a request has already been filed in court and the court is due to decide whether to start the procedure on June 17.

Unlike ArcelorMittal, Zhevago is unwilling to pay the full principal to Kremikovtzi's bondholders, Dnevnik said. Kremikovtzi shares closed trading on May 8 at 9.09 leva, which valued the steelworks at 163 million leva and the 71 per cent majority stake owned by Pramod Mittal - at 116.2 million leva.