Latvian steelmaker KVV Liepajas Metalurgs risks being cut from power, gas supplies

Latvia's KVV Liepajas Metalurgs steelmaker may be cut off from power and gas supplies soon because of unpaid bills, energy companies warned this week.

Latvijas Gaze natural gas utility issued a formal warning to KVV Liepajas Metalurgs on Thursday after the metallurgical company missed the deadline for a 224,000-euro bill (about 252,300 U.S. dollars) on Wednesday.

Latvijas Gaze said it would stop supplying gas to KVV Liepajas Metalurgs as of June 19 if the money was not paid by that date.

On Wednesday, a spokeswoman for Latvia's electricity company Latvenergo said it too might disconnect KVV Liepajas Metalurgs from the power supply due to outstanding electricity bills.

"If KVV Liepajas Metalurgs fails to pay the overdue bills and an agreement on a new payment schedule is not reached, Latvenergo will consider cutting the power supply to KVV Liepajas Metalurgs as of June 15, 2015," Latvenergo spokeswoman Ivita Bidere said.

Ukrainian businessman Valery Krishtal, a co-owner of KVV Liepajas Metalurgs, denied in an interview with Latvia's LNT commercial TV channel on Thursday that the company was struggling with financial difficulties and described the unpaid gas and electricity bills simply as "current debts".

In November 2013, Liepajas Metalurgs was declared insolvent after it ran into financial trouble. The company was eventually sold to Ukraine's KVV, which re-launched the steel plant in March 2015.

In recent weeks, however, some 150 of the company's employees have been laid off. As well, production has been scaled down as the cost price of KVV Liepajas Metalurgs products turned out to be too high to compete with rival companies' products.

The company's management blames the high cost price mainly on expensive energy.

Based in the south-western Latvian port city of Liepaja, Liepajas Metalurgs used to be Latvia's leading metallurgical company and a major provider of jobs in Liepaja. Endit