Indian-born steel magnate Lakshmi Mittal is expected to arrive in Sofia for talks with Prime Minister Sergei Stanishev about the future of Bulgaria's biggest steel mill Kremikovtzi next week, Dnevnik daily reported on April 14, quoting an unnamed source in the Cabinet.
Lakshmi Mittal, the older brother of Pramod Mittal, who now owns 71 per cent in Kremikovtzi, is one of at least two potential investors left in the race for Kremikovtzi, the daily said.
Ukrainian billionaire Konstantin Zhevago, who controls London-listed iron ore mining producer Ferrexpo, is reported to be the other bidder. Zhevago, who is looking for a steel mill to process Ferrexpo's output, made a bid for Kremikovtzi in January, believed to be in the region of 30 million euro, which was rejected by Pramod Mittal as too low. Zhevago has recently re-financed his outstanding debt and has the financial clout to up his offer, Dnevnik said.
Lakshmi Mittal is willing to offer 50 million euro, just one third of his brother's 150 million euro valuation of Kremikovtzi, the Sunday Times reported on April 13. The newspaper
claimed that Pramod "cracked and appealed to his brother to help him", quoting sources close to Lakshmi that he was "keen" to sell to his older brother. Lakshmi Mittal has a long track record of buying loss-making steelworks and turning them around, including in neighbouring Romania.
US Steel has withdrawn from the race for Kremikovtzi, while Ukrainian billionaire Rinat Ahmetov appears to have lost interest as well, Dnevnik said, quoting an unnamed holder of Kremikovtzi bonds.
The holders of Kremikovtzi's 325-million-euro bond issue, who are pressuring Pramod into selling his stake, are ready to liquidate the mill's assets unless they find an investor willing to pay out 101 per cent of the bond principal. Bulgaria's Government, which owns 25 per cent in Kremikovtzi has staunchly maintained that it would block any move in that sense.
Kremikovtzi total debt, including late payments on deliveries of raw materials and wages, were much higher than the outstanding bonds, totalling 505 million euro at end-January, Dnevnik reported. The steel mill's employees are scheduled to protest again over unpaid wages on April 15, claiming they are yet to receive part of their paychecks for February and March, as well as bonuses dating back to November 2007.
