Steel major ArcelorMittal has extended 30 million euros ($46.79 million) as emergency funding to Bulgaria's ailing steelmaker Kremikovtzi, the mill said on Tuesday.
Last week Kremikovtzi said it was considering offers for financial help from ArcelorMittal and Ukrainian billionaire Kostyantin Zhevago. Both are interested in taking over the Balkan country's biggest steelmaker.
It is true that we are going to use the funds from ArcelorMittal, but there is no contract signed. A final choice between the two offers has not yet been made, a Kremikovtzi spokeswoman told Reuters.
Indian Pramod Mittal, the majority owner of Bulgaria's largest steel mill and the younger brother of ArcelorMittal's chairman Lakshmi Mittal, put the mill up for sale after failing to provide funds for working capital and environmental upgrades.
Both bidders say they would prefer the indebted plant to go through the insolvency procedure before the sale is completed.
ArcelorMittal, the world's largest steelmaker, has pledged to extend 30 million euros to cover immediate due payments and salaries and was willing to provide another $180 million in financial aid in return for acquiring assets, a copy of the offer, obtained by Reuters, showed.
ArcelorMittal had also offered to invest $500 million in the plant over the next five years after it acquires the mill's assets through a bankruptcy procedure, on the top of the mill's debt -- which amounted to 1.67 billion levs at the end of 2007.
Zhevago, who controls Ukrainian iron ore producer Ferrexpo has offered to provide to provide $90 million in working capital in exchange of joint management of Kremikovtzi for at least a year.
Kremikovzi, which accounts for 10 percent of Bulgaria's exports, said its management board would soon decide which of the two offers to accept.
Earlier this month, a Bulgarian court appointed two temporary receivers to the plant after several privately held companies had sought court action over Kremikovtzi's unpaid debts.
In March, the holders of Kremikovtzi's 325 million euro bond asked for its immediate repayment, and could take over the mill if it fails to pay them back. (Reporting by Tsvetelia Ilieva; Editing by Louise Ireland)
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