The Bulgarian Economy and Energy Ministry refused to give Kremikovtzi steel mill a three-month extension to cover its overdue payments. The news broke at the same timewith the announcement that a court levied a 239.2 million fine on Finnmetals Holding, the owner of Kremikovtzi, for its failure to come up with investment guarantees, Dnevnik daily reported.

As reported earlier, the Sofia City Court ruled in favour of the Agency for Post-Privatisation Control (APPC) in a case that dragged on for four years, whose start saw Kremikovtzi change ownership. In 2003, despite Kremikovtzi assets being impounded, its then-owner Valentin Zahariev sold the majority stake in the steelworks.

The decision of the Sofia City Court is final.

The sum is the leva equivalent of 180 million US dollars that the majority owner at the time had to pay to APPC to ensure implementation of its five-year investment programme. Roussi Statkov, member of the APPC supervisory council told Dnevnik daily that Mittal had to provide $30 million in bank guarantees and $5 million as promissory note.

Speaking to media on February 20, Economy and Energy Minister Petar Dimitrov said that there was no more room for compromise.

The resolute statement comes only days after the new management of the mill asked for a 90-day grace period for the mill's late payments to the Bulgarian State Railways (BDZ), the National Electric Company (NEC) and Bulgargaz, all the state-run companies in the rail transportation, electricity and gas sectors, respectively.

Kremikovtzi majority owner Pramod Mittal said that the period would be sufficient to bring the mill back to operational profits and to find a strategic partner to help revamp Kremikovtzi.

Last week, BDZ halted servicing the mill for several day and on February 20 the trade unions at Kremikovtzi said gas supplies had thinned out.

On the same day, the unions warned that should the Government not stick to its January 31 promise, when the steel mill workers went on strike in Sofia downtown, they would go on strike again, this time outside Parliament.

The preliminary financial figures on the holding's performance in 2007 showed the mill was running a loss for the third year running. According to the company's report, the mill narrowed its loss from 280.79 million leva in 2006 to 35.93 million leva. However, the improvement was not attributable to production uptick, rather to a large-scale sale of assets.

In 2007, the company sold assets worth 104 million leva, 26 times more than the previous year before. Meanwhile, production decreased, especially in the latter months of the year.