August 22, 2008

Mr Zhevago likely to buy Kremikovtzi – Reports

As per reports in Bulgarian media, Global Steel Holding’s Bulgarian steel plant Kremikovtzi may be sold to Mr Konstantin Zhevago of Ukraine very shortly. The reports quoted Mr Alexander Tomov CEO of Kremikovtzi as telling media that "The talks are being held in London. An agreement might be reached today or tomorrow.”

Mr Tomov added that the current owner of the plant, must chose fast whether to invest EUR 140 million to clean up its act of the plant, which is the country's biggest polluter or sell the majority stake to another investor. He said that “The new owner will have to invest about EUR 200 million more in the modernization of Kremikovtzi.”

Dizzying climb of 33 year old Mr Zhevago, whose fortune estimates about USD 1.5 billion, dates back to 1993 when he became financial director of the Finance and Credit group. In 1996 he took over as head of the group. That same year he took control of the enrichment complex of Poltava the world's fourth largest iron ore deposit He also controls domestic truck maker AvtoKraz. His Swiss based Vorskla Steel is putting up HSM at Hungary and some other locations also, Mr Zhevago is also an MP from the party of Ms Yulia Timoshenko.

Finmetals had privatized the factory in 1999 for a token price of USD 1 while pledging to pay its debts of some USD 400 million. Global Steel Holdings bought 71% of Kremikovtzi for an undisclosed price in 2005 and had reportedly pledged to invest USD 340 million to modernize the plant and help it meet European Union environmental safety requirements. The Bulgarian state still controls 25% of Kremikovtzi, while the remaining 4^ are owned by individual investors.

As per reports, currently Kremikovtzi is under pressure because of its ineffective environmental program. Apart from paying serious monthly fines, the enterprise is under the pressure of being closed.