Latvian gov't fails to strike deal with potential buyer of ailing steelmaker KVV Liepajas Metalurgs

RIGA, Jan. 15 (Xinhua) -- The Latvian government's talks with the potential investors of ailing steel firm KVV Liepajas Metalurgs has failed because it has now been decided to split the company's assets and auction them off.

KVV Liepajas Metalurgs is a firm based in the southwestern Latvian port city of Liepaja.

Guntars Koris, the troubled steel company's insolvency administrator, announced the decision to the media on Monday, saying that none of the potential buyers had provided the necessary guarantees to prove their ability to acquire the steelworks in one piece and bring the plant back to life.

Millionaire Igor Shamis, who has been holding negotiations with the Latvian government on the acquisition of KVV Liepajas Metalurgs, also spoke to reporters on Monday. He said he still had not lost hopes to buy the troubled company and relaunch its operations.

Although Shamis called the insolvency administrator's decision to sell KVV Liepajas Metalurgs at auctions "unexpected" and a "big mistake", he said he still hoped to reach a deal with the Latvian authorities.

"We still have hopes. Our offer remains on the table and is being considered. It's all very simple. What we are saying is that we are ready to start rolling right away. To do that, we are ready to buy materials for making rebars with our own money," Shamis told reporters.

The potential investor has offered 42 million euros for KVV Liepajas Metalurgs. "Nobody has offered more," he said, adding that he would pay the first installment of 7.5 million right after the acquisition deal is made.

Ukraine's KVV Group acquired Liepajas Metalurgs in 2014, promising to pay 107 million euros in several installments for the insolvent metallurgy company.

After struggling with financial troubles for months, KVV Liepajas Metalurgs halted production in March 2016 and laid off some 300 workers. About 100 workers remained to keep the steel plant on "standby mode". The Ukrainian investor never paid the full price for the acquisition and the company ended up in the Latvian government's control again.

In September 2016, a district court ruled Liepajas Metalurgs insolvent. (1 euro = 1.23 U.S. dollars) Enditem