Pramod Mittal, the majority-owner of Bulgaria's biggest steel mill Kremikovtzi, has asked his older brother Lakshmi "to help him" with investments in Bulgaria and Nigeria, the Sunday Times reported.
Lakshmi Mittal, who owns the world's biggest steel maker ArcelorMittal, has offered to pay around 50 million euro for Kremikovtzi, just one third of the 150 million euro that Pramod values it at, the paper said.
“The reality is that there is no love. People will think his big brother Lakshmi is bailing him out, but he’s not, he’s squeezing him out,” the Sunday times quoted a source close to the family as saying.
The Times claimed that Pramod "cracked and appealed to his brother to help him", quoting sources close to Lakshmi that he was "keen" to sell to his older brother, something that Pramod has denied, at least as far as Nigerian operations are concerned.
Lakshmi, who has a long track record of buying loss-making steelworks and turning them around, including in neighbouring Romania, appears to be the buyer preferred by the Bulgarian Government, which holds 25 per cent in Kremikovtzi.
Merrill Lynch, hired by Pramod to advise him on selling Kremikovtzi, said earlier this month that it has contacted about 20 steelmakers worldwide, seven of which expressed tentative interest and three entered into intensive talks. ArcelorMittal is one of those three companies.
Bulgaria's Economy Minister Petar Dimitrov has said that the Cabinet will agree to any investor ready to start pouring money into Kremikovtzi's viability plan, which includes measures to cut down emissions, and prevent the company from amassing any more debt toward state utilities NEC and Bulgargaz, as well as railway BDZ, for electricity, gas and delieveries of raw materials, respectively.
The holders of Kremikovtzi's 325 million euro bond issue, who are pressuring Pramod into selling his stake, are ready to liquidate the mill's assets unless they find an investor willing to pay out 101 per cent of the bond principal. Bulgaria's Government has staunchly maintained that it would block any move in that sense.
