A recovery plan for the insolvent Bulgarian steel mill Kremikovtzi was submitted on Monday, June 29, at Sofia City Court by Tsvetan Bankov who is the assignee in the bankruptcy of the mill, local media have reported.
The recovery plan involves the capitalization of Kremikovtzi's debt, making the claims of creditors, as allowed by law, part of the capital. However, the debt to public institutions will not be capitalized. The plan will be included as part of the bankruptcy case materials, and might come into force after a ruling by a judge, and after agreement on the part of the company's creditors, who are scheduled to hold a meeting in July. If the presented recovery plan is not approved, the most likely outcome would be the commencement of procedures to finally shut down the steel mill.
Kremikovtzi has over BGN 1 billion of mounting debt (approx. $721 million). As SteelOrbis previously reported, after several delays, in May 2009 Bulgargaz suspended gas supplies to Kremikovtzi over unpaid bills, following the plant's failure to attract a strategic investor. However, in June some gas supply was temporarily resumed to the mill to enable the completion of a scrap contract. In addition, the National Electric Company (NEC) also threatens to cut electric power supply to Kremikovtzi over its debts.