On Friday morning, May 15, the Bulgarian state-owned gas distributor Bulgargaz commenced the gradually suspension of gas supplies to local insolvent steel mill Kremikovtzi, after negotiations between Brazilian metallurgy giant CSN, the only potential bidder for the troubled steel mill, and Kremikovtzi management concluded without any agreement. The 2 pm deadline on May 14 for Kremikovtzi to pay off its debt to Bulgargaz or face the halt of gas supplies was yesterday postponed until this morning.
The suspension of gas supplies means the shutdown of Kremikovtzi's coke-chemical plant. There have been riotous scenes in the Bulgarian capital Sofia with thousands of workers protesting in the streets against the closure of the steel mill.
According to Bulgargaz director Dimitar Gogov, Kremikovtzi's gas supply debts amount to BGN 105 million (approx. $73 million) and the likelihood of this sum ever being repaid is very slim.
Meanwhile, it is reported that the Ukrainian company Konkort is interested in purchasing Kremikovtzi's coke-chemical plant and its thermo-electric power plant. The thermo-electric power plant may also be purchased by the state and subsequently resold, according to Bulgarian union official Vasil Yanachkov. Thus, salaries of workers at the steel mill that have not been paid for five months would be paid in full.
Moreover, according to reports, the problems with Kremikovtzi have resulted in a 50 percent drop in cargo traffic at the southeastern Bulgarian port of Burgas. The situation has been further aggravated by the economic crisis, with the port currently operating at just 30 percent capacity. If the situation does not improve about 200 workers at the port will be laid off, the port's executive director Argir Boyadjiev stated.