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COBALT advise the State Treasury in the sale of AS Liepajas Metalurgs to KVV Group

2015-02-19

COBALT advised the State Treasury of the Republic of Latvia on behalf of the Ministry of Finance of Latvia in connection with the sale of the business enterprise of insolvent AS Liepajas Metalurgs to KVV Group within the insolvency proceeding of AS Liepājas Metalurgs.

Republic of Latvia became a secured creditor of AS Liepajas Metalurgs, one of the largest industrial companies in Latvia, in 2013 when it performed its obligations to UniCredit S,p.A under a state guarantee provided by it. Shortly thereafter, in November 2013 AS Liepajas Metalurgs was declared insolvent. In September 2014, the Government of Latvia approved the offer of KVV Group for the acquisition of business enterprise of AS Liepajas Metalurgs on the terms of deferred payment, pursuant to which KVV Group inter alias agreed to took over the secured debt obligations of AS Liepajas Metalurgs to the Republic of Latvia and repay it over a period of ten years. Completion of the sale of the business enterprise was conditional upon KVV Group entering into arrangements satisfactory to the Republic of Latvia and other secured creditors of AS Liepajas Metalurgs in respect of repayment of their secured claims to Liepajas Metalurgs.

The sale of the business enterprise was completed in December 2014 and KVV Liepajas Metalurgs, a company of KVV Group, took over the assets of AS Liepajas Metalurgs in January 2015.

KVV Group is a Ukrainian holding company registered in Kiev operating in scrap metal business. Its main business is scrap purchase, processing and delivery to Ukraine and its export, as well as metal production, construction and port services. The KVV Group holding consists of 30 companies, employing approximately 2000 employees.

COBALT advised the client on the debt repayment and security documentation, as well as in the closing of the transaction.