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"Liepajas metalurgs" on the brink of insolvency

 RIGA, March 27 - The financially-troubled joint stock metallurgical company "Liepajas metalurgs" (LM) is on the verge of insolvency, according to a report on the company's finances obtained by "Nozare.lv".

The company's management points out that if the situation does not improve or no agreement is made with the largest creditors, LM will not be able to fulfill its liabilities in April already.
LM has received insolvency warning letters from the state-owned joint-stock power utility "Latvenergo". "Latvenergo" warns that if LM does not settle its electricity debts until March 28, "Latvenergo" will request LM's insolvency and stop supplying electricity to LM.

"Ernst&Young" predicts that, depending on various circumstances, "Liepajas metalurgs" will lack LVL 96.1 million at the end of 2013.

At the moment, LM lacks net working capital. At the end of January, the company's working capital was negative - minus LVL 17.5 million.

LM net debt commitments totaled LVL 103.6 million at the end of 2012, including a loan from "UniCredit" - LVL 51.7 million, "SEB banka" and "Citadele" credit lines - LVL 22.4 million, a debt to "Stemcor" - LVL 10.5 million, a debt to "Latvenergo" - LVL 8 million.

As reported, the Cabinet of Ministers made no decision yesterday on whether to bail out LM, noting that it wants to see greater activity from the shareholders in the crisis.

"It is hard to see any solution to LM’s problem when there is no clear business plan or any desire to get involved," Finance Minister Andris Vilks (Unity) pointed out. He called "inexplicable" the idea that the government will rush to solve the company’s problems, adding albeit that "something must be done".
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