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Latvian steel company faces six-figure insolvency lawsuit

Xinhua, December 18, 2015 Adjust font size:

A lawsuit has been filed against Latvia's KVV Liepajas Metalurgs steelmaker in which the plaintiff asks court to declare the company insolvent over an outstanding six-figure debt.

Information on the website of the Latvian Insolvency Administration shows that the city court in the southwestern Latvian city of Liepaja is scheduled to hear the case on Dec. 29.

The insolvency lawsuit has been filed by Elme Messer Metalurgs, an Estonian-owned producer of industrial gases which has been supplying oxygen to KVV Liepajas Metalurgs.

Elme Messer Metalurgs claims KVV Liepajas Metalurgs failed to pay for the oxygen and has run a six-figure debt to the supplier.

The legal action is worrying the Latvian government as KVV Liepajas Metalurgs is due to repay the government 2.678 million euros by Dec. 27.

The Finance Ministry has asked KVV Liepajas Metalurgs to inform about its further business plans and how the company intends to meet its obligations to its creditors, the Latvian state included.

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

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