Lakshmi Mittal to pay 328 million Euro for Kremikovtzi

Indian billionaire and owner of steel plants Lakshmi Mittal is the only candidate buyer for the Kremikovtzi Metallurgical Plant, who is ready to square the deal with the bondholders of the company at 101 percent. This is what representatives of the committee of the five biggest holders of debt securities announced. The new owner will have to meet the obligations concerning the bond emission, guaranteed by the majority share of Kremikovtzi, belonging to Pramod Mittal (71 percent) and main securities of the company. The nominal value of the emission is 325 million Euro, but in change of ownership it has to be paid out at 101 percent which makes it 328.25 million Euro, according to the prospectus for their offer from 2006.
It is the promptness, demonstrated by Mittal to square the deal with almost all shareholders that makes him the favourite of bondholders. The big obstacle facing all candidate buyers is related to the fact that apart from squaring the bill with Pramod Mittal, they will have to have another 328.25 million Euro to pay out the bonds, and 150 million Euro for the installation of purifying facilities. This makes the total costs for acquisition too high, experts commented.
It is claimed that Ukrainian MP and owner of a source of iron ore Konstantin Jivago has not given up his wish to acquire Kremikovtzi. This way he will be able to come out on the European market as a supplier not only of iron ore, but of an end product as well. Currently, the rates of iron ore and steel mark historic peaks on international markets and expectations are that their prices will keep rising for at least one more year. Kremikovtzi owes money to Jivago for deliveries of iron ore. It is assumed that the Ukrainian is considering a procedure of insolvency of the plant, which could discourage the other candidates for Kremikovtzi and make Jivago the only candidate buyer.

Source: Neurope