Kremikovtzi's AD Destiny Is still Unknown
OREANDA-NEWS. On 28 January 2008 from Ukraine emerged one more pretender to Kremikovtzi AD, a Bulgarian steelmaker. According to Alexander Tomov, executive director of the steel company, the deal on this steelmaker sale may be finalized in few days. The executive director specified that the current owners of a 71% stake in Kremikovtzi – Global Steel Holdings, controlled by brothers Pramod and Vinod Mittal, face a dilemma: either to find EUR 140 mn to implement an ecological program or find an investor: “The current Indian owners experience difficulties with the investment program implementation due to the financial crisis.” Global Steel Holdings purchased Kremikovtzi AD in 2005. According to the experts, the deal worth amounted to about EUR 100 mn. Pursuant to the business plan, within 4 years the company had to invest about $300 mn into the steelmaker development. Recently, in Bulgaria there are actively discussing whether to close this steel producer that located only in several dozens of kilometers from its capital – Sofia.
Earlier, Bulgarian mass media informed that Pramod and Vinod Mittal, have carried out negotiations with Metinvest representatives in Austria. By January 24, Global Steel Holdings would have specified the price for which the current owners of the Bulgarian-based steelmaker were ready to sell this asset. According to the Bulgarian mass media, the negotiations between Global Steel Holdings and Metinvest were mediated by Vadim Novinskiy, who participates in the group and is a shareholder of another Bulgarian-based entity - Promet Steel.
Kremikovtzi steelmaker is the largest iron and steel company in Bulgaria. There are few large iron and steel companies in Bulgaria. The country produces approximately 2 mn tonnes of steel per year (or 1% of the total steel output in the EU), while recently a certain decline in the steel output has been observed (but not exceeding 10% a year). The shares of the steelmaking companies are as follows: 70.5% – Kremikovtzi AD, 28.5% -- Stomana Industry AD and just 1% -- Radomir Metals AD. The rolled-products output in Bulgaria amounts to 1.6 mn tonnes (and 1.8 mn tonnes in early 2000s), while the shares of the Bulgarian companies are as follows: 55% -- Kremikovtzi AD, 28.7% -- Stomana Industry AD and 16.3% -- Promet Steel.
The key producer of inputs for iron production is Kremikovtzi AD. It is the only producer in Bulgaria of cast iron (1080 thousand tonnes), coke (690 thousand tonnes) and iron-ore agglomerate (1818 thousand tonnes). In the recent years, the coke and cast iron production dropped, while the agglomerate output increased. In case of coke produced from the imported coal, the aforesaid can be explained — in 2004, the second blast-furnace was stopped at the plant. In general, the capacities for cast iron production was utilized 100%, while for coke and agglomerate output – usually by half, or, under the favorable circumstances, – by two-thirds. On the whole, the own iron ore production in the first half of 2000s dropped from 559 to 83 thousand tonnes per year due to the very low Fe contents. Presently, several companies are affiliated with this steelmaker, including mining company, ferroalloys plant, transport and logistics companies.
This iron and steel company was established back in 1959, and the main production was launched in 1960-1963. The years 1996-1999 was the period of privatization, but its results were not quite satisfactory – the company accumulated accounts payables, primarily, for energy carriers. As a result, the key owner of Finmetals Holdings Corp. was bought in August 2005 by Global Steel Holding Ltd (GSHL). Now, 71% — holds GSHL and 25.29% is controlled by the Bulgarian government. In May 2006, in connection with Bulgaria accession to the EU, the European Commission initiated the reconstruction of this steelmaker.
GSHL holding manages steel and other producers in many countries (Bosnia and Herzegovina, India, Nigeria, etc). The total steel output exceeds 14 mn tonnes and the iron ore production — 260 mn tonnes. However, the key peculiarity of GSHL — is its affiliated relations with Mittal Steel (before – with Ispat) in general, and with Mittals family, in particular. No wonder that the board chair name is Pramod Mittal.
Kremikovtzi iron and steel for 9 months of 2007 increased its net sales by 26.6% as against the comparable period of 2006 – to EUR 390 million.
Комментарии