Банкеръ Weekly

Briefs

KREMIKOVTSY BETS ON UNINTERRUPTED STEEL CASTING

Till February 15 Kremikovtsy is expected to sign a contract with the Austrian Feughst Alpine to finalize the establishment of the uninterrupted steel casting line. The information was submitted on Tuesday by Valentin Zachariev, Executive Director of the metallurgy plant. At present the negotiations with Austrian experts on the conditions of the establishment are ongoing. Work on the line is expected to start in April or May, and its putting into operation is planned for mid 2002. Kremikovtsy management insists on turn-key deal with Feughst Alpine. That means that in case of some operational faults, they will be removed by and for the account of the Austrian company.
Total investment made by the Sofia-based plant for putting into operation the uninterrupted steel casting line will amount to USD29MN. For the financing of that investment are approached the Swiss UBS and the Bulgarian BULBANK and First Investment Bank (FIB). Most probably FIB will launch a credit of USD8MN. According to Valentin Zachariev, the total effect of the investment will be cost reduction of USD30-35 per ton. Having in mind the 1.4MN tons of steel sold in 2000, that would mean saving of at least USD42MN annually.
Feughst Alpine delivered the uninterrupted steel casting line to Kremikovtsy in the late 1980s. Thus originated the plant's liability of BGL106MN to the already former Economic Bank.
In 2001 the Sofia-based plant is expected to make further investment in the purchase of hot and cold rolling equipment. It amounts to EUR30MN and Kremikovtsy will probably again be credited by BULBANK.

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