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KVV Liepājas metalurgs to be auctioned off

Photo: flickr.com.
Insolvency administrator to the bankrupt KVV Liepājas metalurgs Guntars Koris has decided to sell property owned by the company at an auction, as confirmed by the administrator’s representative Dzintars Hmieļevskis.

This decision was made because none of the contenders to purchase KVV Liepājas metalurgs have complied with conditions put up by creditors and have not provided guarantees that would demonstrate the ability to buy the business as one whole and restore its function.

In accordance with the Insolvency Law, the administrator has made changes to the sales plan for the company’s property.

On 4 January, the Latvian government decided to give potential investors two weeks to make their decision on the purchase of the company. Economy Ministry Arvils Ašeradens said that talks with potential investors have not ceased, it is just that investors want more beneficial conditions. At the same time, the government is interested in recovering as much previously invested money as possible even though it is clear that it will not be possible to recover the entire amount.

According to him, the government will wait for the potential investor’s decision for two more weeks. During this time the investor will have to submit guarantees and transfer finances to accounts of KVV Liepājas metalurgs’ creditors. If this is not done in two weeks, the government will consider selling the company in separate parts.

The minister also said that several potential investors have expressed an interest in purchasing KVV Liepājas metalurgs. «The investor in question is the only one with whom active talks are underway. Still, other investors have expressed an interest in KVV Liepājas metalurgs as well. However, we have yet to commence active talks with them,» added Ašeradens.

When asked about possibilities for development of KVV Liepājas metalurgs territory if the government decides to sell the company in separate parts, the minister said that it is possible to establish an industrial park there. «It is possible to develop an industrial park there, considering excellent infrastructure. This would provide an opportunity to develop a new industrial zone in Liepaja,» said Ašeradens.

In November 2017, Ašeradens said that KVV Liepājas metalurgs’ potential investor voiced an interest in testing the company’s furnace. It was initially planned for the investor to end the test on 19 December. Once results would arrive, the investor would announce the decision – to buy or not to buy the company. However, KVV Liepājas metalurgs administrator Guntars Koris’ representative Dzintars Hmieļevskis admitted on 19 December that the potential buyer declined the previously voiced request to test the furnace.

AS K-1 Liepaja Metallurgical Plant was registered in Latvia at the end of September 2017. According to unofficial information from LETA, it is a legal person that was founded to take over ownership of KVV Liepājas metalurgs property.  The aforementioned company had increased its capital from EUR 35,000 to EUR 7.54 million in October 2017. The sole board member of K-1 Liepaja Metallurgical Plant is citizen of Israel Igors Šamiss.

He was one of the two main contenders to be sold the property of Liepājas metalurgs three years ago. In the end, however, the company was sold to Ukrainian KVV Group. Luxembourg-based United Group owned Russian-born millionaire Šamiss purchased Liepājas metalurgs main production plant for EUR 120 million. KVV Group offered EUR 107 million.

KVV Liepājas metalurgs was declared insolvent in September 2016.


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