Friday May 15, 06:57 PM
Bulgarian steelmaker Kremikovtzi announces shutdown
SOFIA (AFP) - Bulgaria's gas monopoly Bulgargaz cut deliveries to insolvent steelmaker Kremikovtzi on Friday, shutting down all coke and iron production, the plant announced.
"At 12:30 pm (0930 GMT) Friday, the state gas company Bulgargaz definitively cut gas deliveries to Kremikovtzi," the plant's main energy official Nikolay Savov announced.
Bulgargaz had lately delivered only minimum gas supplies to the heavily indebted plant to keep its production facilities operational even though it was not producing.
But the gaz company, to which part of the debt is owed, warned Kremikovtzi this week to prepare for a complete cut in deliveries and began to gradually lower supplies early Friday.
The plant on the outskirts of Sofia, which is the biggest steelmaker in the Balkans, already closed its two remaining blast furnaces in October for lack of raw materials and orders, and narrowly avoided a complete shutdown several times.
But while no longer producing iron, it struggled to keep operational its coke plant, the basis for steel production, as shutting it is now irreversible.
In August, a court in Sofia began insolvency proceedings against Kremikovtzi, whose total debt exceeds 2.37 billion leva (1.2 billion euros, 1.65 billion dollars) -- half of it owed to the government and the state-owned electricity, gas and railway companies.
Meanwhile, its owners, Pramod Mittal's Indian Global Steel Holding and the Bulgarian state, sought to find an operator to run it until insolvency proceedings opened the way for its sale.
After talks with a last bidder failed on Thursday, the gas company finally halted deliveries.
Mittal, the younger brother of Indian steel tycoon Lakshmi Mittal, holds a 71-percent stake in the ailing plant, with a further 25 percent owned by the state.
Early on Friday, more than 1,000 plant workers marched on the ministry of economy and energy in downtown Sofia, after threatening earlier to boycott shutdown preparations by walking out on the job, prompting warnings by experts that this may cause accidents.
Two workers were arrested during brief clashes with police as the angry crowd tried to storm the ministry with shouts of "Traitors!" and "Garbage!", the interior ministry said.
The angry crowd then returned to the plant in the afternoon and threw stones at the administrative building, which was cordoned off by police, an AFP photographer reported.
Kremikovtzi has already shed about 1,500 workers this year and over 3,500 more jobs are now at risk.
With an annual production capacity of 1.4 million tonnes, Kremikovtzi, a former symbol of Bulgaria's Communist-era glory, accounted for two percent of Bulgaria's gross domestic product and formed 10 percent of the country's exports to the European Union.
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