Kremikovtzi steel mill will shortly be run by court-appointed trustees, a senior manager at the mill told Dnevnik daily on condition of anonymity on May 7.

A court pronounced to this effect on April 30, he said.

In her remarks on the ruling, judge Daniela Marcheva said that Kremikovtzi's current liquidity ratio was 1.2, whereas the industry average was two. The quick liquidity ratio was 0.24, whereas its cash ratio was 0.00062. Liquidity ratios are used to determine a company's ability to pay off short-term debt, meaning that higher higher ratios offered a better margin of safety. 

Under Bulgaria’s Public Offering of Securities Act, Kremikovtzi is required to make the news about the trustees’ appointment public, as is the publication of a financial report for the first quarter of the year by April 30. The steel mill did neither.

Insolvency proceedings against the mill were started at the request of Peshtoremont AD and several smaller companies, to whom Kremikovtzi owes a cumulative total of three million leva. The class lawsuit had more companies as plaintiffs, but several companies dropped out after the mill paid its debts.

Any deal for the sale of Kremikovtzi's majority stake by Indian owner Pramod Mittal would need the trustees' approval to go through.

The court is due to issue a final verdict on the proceedings on June 17. Shares of Kremikovtzi steel mill nosedived 22 per cent in May 7 trading.