Kremikovtzi steel mill is inevitably heading toward bankruptcy, a senior executive at steel giant ArcelorMittal said on June 4, as quoted by investor.bg.

The latest quotes of Kremikovtzi's stock on the Bulgarian Stock Exchange (BSE) showed investors finally believed that this scenario was the sole plausible, the website said.

Shares of the debt-laden steel mill plunged to 4.473 leva in June 4 noon trading, down 30 per cent from the day before and nearly half the valuation the stock had on May 21. That day Bulgaria's Economy and Energy Minister Petar Dimitrov admitted in public a group of creditors filed for bankruptcy proceedings with a local court.

The court, though, is yet to rule on the plea. Also on May 21, a Bloomberg report claimed ArcelorMittal was ready to pay $1.2 billion for the mill.

On June 4, the senior ArcelorMittal manager said Kremikovtzi's bankruptcy proceedings would last about four months.

Volker Schwich, vice-president at ArcelorMittal's project department, who is also in charge of Central and Eastern Europe, was quoted by Bulgarian news agency BTA as saying that the Government's support was integral in stabilising the mill until its assets were subject to sale.

ArcelorMittal was about to send a letter to this effect to Bulgaria's Prime Minister Sergei Stanishev. He underscored that should the Government and the court live up to its promises and announce bankruptcy proceedings, Arcelor would invest the promised amount.

Schwich ruled out that Kremikovtzi could be revitalised under a scenario other than bankruptcy.

The letter should also enumerate the commitments of ArcelorMittal should the company emerge the preferred buyer for the mill. Arcelor was also ready to invest $500 million in the mill, of which $100-150 million would be in operational expenses.

The steel giant was also ready to clear dues by signing an agreement with each single creditor under strict payment terms. The mill's total debt burden amounts to 1.5 billion leva.

According to Shwich, Arcelor also planned to invest $30 million on meeting the minimum environmental requirements in June and July. The environmental spending backlog over the medium term is seen by Arcelor at $120 million.

Meanwhile, the European Commission announced it cleared the joint venture between ArcelorMittal and Turkey's Borusan Holding, whose core activity would be the production of hot strip steel.