KVV Liepā­jas met­alurgs’ po­ten­tial in­vestor given two weeks to con­sider pur­chase

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The po­ten­tial in­vestor of in­sol­vent KVV Liepā­jas met­alurgs is given two weeks to con­sider pur­chas­ing the com­pany, says Lat­vian Econ­omy Min­is­ter Arvils Ašer­adens. He ad­mits that talks with the po­ten­tial in­vestor are not over; the in­vestor wants to se­cure the most ben­e­fi­cial con­di­tions in busi­ness ne­go­ti­a­tions. Lat­vian govern­ment is also highly in­ter­ested in get­ting back the money it has in­vested in sav­ing the com­pany, even though it is clear that it will be im­pos­si­ble to re­cover the en­tire amount. «The govern­ment won’t get all of its money back. A spe­cific amount will be voiced once an agree­ment has been reached,» said the min­is­ter.

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.

Evija Tri­fanova/LETA

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