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Latvian firm disconnected from gas supply over unpaid bills

Xinhua, February 19, 2016 Adjust font size:

Latvijas Gaze natural gas utility on Friday stopped supplying gas to KVV Liepajas Metalurgs metallurgical company in the southwestern Latvian city of Liepaja because of its failure to pay outstanding gas bills, local media reported.

"Since the debt still had not been paid until Feb. 18, 2016, the total debt of KVV Liepajas Metalurgs has continued to grow and KVV Liepajas Metalurgs has not signed an agreement on a gradual pay-off of the debt," the gas company's representatives said, noting that the plant has been disconnected from gas supply.

Latvijas Gaze said gas supply will be resumed as soon as the debt is paid.

To date, KVV Liepajas Metalurgs owes Latvijas Gaze more than 640,000 euros (709,860 U.S. dollars) for the gas supplied to the steel company's plant.

Latvijas Gaze issued its first warning to KVV Liepajas Metalurgs already at the beginning of February after the metallurgical company missed several deadlines for paying its gas bills.

On Feb. 1, KVV Liepajas Metalurgs stopped production citing unfavorable market trends.

In January, KVV Liepajas Metalurgs asked the Treasury to postpone a payment of 2.7 million euro the company was supposed to make in late 2015.

Liepajas Metalurgs, based in the south-western Latvian port city of Liepaja, was acquired by Ukraine's KVV Group in October 2014. Under the agreement, the Ukrainian company is expected to pay 107 million euros for the Latvian metal working company in several installments over the next 10 years.

Liepajas Metalurgs was declared insolvent on Nov. 12, 2013 after the company ran into financial trouble and had to cease production in spring 2013 due to a shortage of working capital. (1 euro=1.11 U.S. dollar) Endit