Bulgaria's Government will keep Kremikovtzi operational and ordered three stat-run companies to restart servicing the steelworks, hoping to help draw investor interest to the floundering company.
The Economy and Energy Ministry will participate in propping Kremikovtzi up and the sale of the majority stake, now owned by Indian businessman Pramod Mittal, deputy economy minister Nina radeva was quoted as saying by Dnevnik daily on March 13.
She added that she was hopeful that Merrill Lynch, hired by Mittal to find a buyer for the steel mill, would find a strategic investor by the end of the month.
State-run gas firm Bulgargaz and power grid operator NEC would resume the delivery of raw materials, while railway carrier BDZ would again service Kremikovtzi, Dnevnik said, quoting the ministry.
Kremikovtzi also paid half of the outstanding debts to its employees and the rest was expected to be paid by the end of the week, labour union bloc CITUB said, claiming that an agreement to that end was signed late on March 12 between the steel mill's owner and energy minister Petar Dimitrov.
The three companies cut deliveries to the bare minimum in a move widely seen as pressure on Mittal to sell. The Cabinet was unhappy with how the mill, which it says accounts for two per cent of Bulgaria's annual gross domestic product, was run and Dimitrov even suggested the appointment of a trustee that would take charge of its daily operations.
The Government also argues that Mittal did not deliver on his contractual obligation to invest in the upgrade of the steelworks. Last month, a court backed its claim, fining Mittal's Global Steel Holdings a total of 239.2 million leva.
Although Dimitrov claimed earlier that five companies were interested in buying out Mittal's stake, Ukraine's Konstantin Zhevago remains the only investor to officially confirm his interest. He flew to Sofia for talks in January, but the deal failed to materialise, allegedly because Mittal thought his offer too low.
Zhevago controls iron ore producer Ferrexpo and is reportedly looking to acquire smelters that would process Ferrexpo's output.
