Банкеръ Weekly



Kalin Rushkov, Procurator of Leko Ko, to the BANKER weekly

On June 30, 1999, 75% of the assets in the Radomir-based plant Leko Ko (a former division of the one-time metallurgical giant, built in Chervena Mogila) were sold at BGL9BN (before the BG lev's denomination) to a consortium between the management-employee company (MEBO) Radomir-Leko Ko-Invest and the private Eurometal OOD. The buyers undertook a commitment to invest in the enterprise the huge amount of BGL11.6BN (prior the BG lev's denomination). This promise, however, remained just a promise, and in end-May 2001 the Executive Director of the Privatisation Agency Plamen Stoilov, responsible for post-privatisation control, announced to the BANKER weekly that defaulted owners of the metallurgical plant will have to pay a substantial penalty exceeding DEM2MN. Meanwhile, shareholder castlings were made in the company.

Mr Rushkov, according to the information which the BANKER got, some changed have been made in the owenership of Leko Ko. Is that true?
- Yes, there are some changes of ownership. Last month Eurometal ODD sold its 34% share participation in Leko Ko to the US company I Fai, registeerd in the offshore zone of Delaware. The remaining 41% of the company's assets are in the hands of the MEBO Radomir-Leko Ko-Invest, and 25% are held by the State.

But even before this deal was closed, you weer appointed a procurator of the company...
- Yes, this was a decision of its shareholders, and as of March 28 I was registered in the Pernik District court as a procurator of Leko Ko. Until then the company was managed by the executive director Sabin Spahiev.

How did you win the trust of shareholders to assign you the management of such a big enterprise as Leko Ko?
- They had probably taken into consideration my experience at the Kremikovtsi iron and steel works where I was employed for three years, as well as my two diplomas for higher education. I am both a lawyer and an expert in foreign trade. The other two new persons in the managerial team - the Radonovs brothers - are also from Kremikovtsi. One of them, Stefan, was for 25 years chief of a special production there, and the other one, Lazar, had 37 years of experience at that metallurgical enterprise, also as deputy production director.

I cannot but ask you what you found here?
- When we were appointed on March 28, the foundry and forge workshop shop had been idle for three months. There were not whatsoever turnover funds and contracts for orders. Within about a week we managed to set the enterprise in operation. We drafted a very ambitious production programme, projecting as target No 1 the restoration of trade contacts with foreign partners, which were almost completely broken. I say foreign, because nearly 98% of the plant's output is intended for export.

Which are the major export destinations?
- Scandinavian countries - Sweden and Finland, foremost. We have also big clients from Denmark and Germany, where we export mainly casting. Ship leases and leases for wind generators sell very well on the American and Candian markets.

Why was then the enterprise idling for months as the market situation is so favourable?
- The reason was probably lack of turnover capital. Our team also faces the same problem, but nevertheless we managed to double the output as compared to last year.

You said you drafted a very ambitious programme. What else does it include apart from regaining of foreign markets?
- We managed to attract new customers, such as Rolls Royce for example. We are currently working out ship leases on their order. We'll also start working with Hitachi Metals and General Electric. Partnership with these three world-famous companies does not only bring prestige to Leko Ko, but is extremely profitable as well.

It turns out that Leko Ko, which was in a difficult situation, found a sound investor in the person of the US offshore company I Fai, which purchased Eurometal's 34% stake?
- Yes, it is an investor with serious intentions.

You mentioned your team also has difficulties in findinding turnover capital. Which are the bank you work with?
- We are presently working with International Bank for Trade and Development. And Bulgarian Post Bank allocated us a credit of BGL2MN, which enabled the new management to put the plant's equipment back in operation. We are now holding negotiations with ROSSEXIMBANK for getting a turnover credit from it.

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