About 600 more workers are to be laid off at the insolvent Bulgarian steel mill Kremikovtzi in line with its recovery plan, Sofia News Agency has stated, citing Tsvetan Bankov, a trade union representative at the mill.
Currently, Kremikovtzi employs 3,100 workers, whereas, according to the steel mill's recovery plan, this number is to be reduced to 2,500. Kremikovtzi used to employ about 10,000 workers in its best days.
According to Mr. Bankov, Kremikovtzi's management has refused to sign a collective labor contract despite trade union demands, as the management says the mill does not have funds for the additional welfare benefits which a contract would entail.
In Mr. Bankov's words, it is unclear whether the bankrupt factory is going to be saved at all.
Meanwhile, Bulgaria is going to get BGN 5 million (about $3.76 million) from the European Globalization Adjustment Fund, in order to help the several thousand workers who might be laid off from Kremikovtzi to find new jobs.
At the beginning of the current month, Kremikovtzi was given a market valuation of BGN 837.2 million (approx. $628.95 million) by consultancy agency Amrita Consulting House. However, the plant's total debt amounts to BGN 1.9 billion (about $1.43 billion) and it is obvious that creditors will not be able to achieve 100 percent of their claims. The liquidation value of assets has been set at BGN 662.7 million (approx. $497.86 million), which represents the possible sale proceeds, adjusted by sale costs and other provisions. The existing assets could be enough to cover between 50 percent and 30 percent 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.