December 02, 2008

Kemikovtzi sued for EUR 350 million by Bond Trustee - Report

Bloomberg reported that Bulgaria's biggest steel mill Kremikovtzi AD was sued for about EUR 350 million by a bond trustee that accused the company of failing to abide by the terms of a note.

According to the trustee Law Debenture Trust Corp, Kremikovtzi did not pay interest to note holders and was notified three times from March through May that the breach made the bonds immediately payable.

According to the claim filed June 6, Law Debenture trustee for Kremikovtzi's seven year 12% notes due 2013, is seeking the EUR 325 million principal amount of the notes plus EUR 23.2 million of interest, which is accumulating at EUR 108,322 a day.

The claim also said that Kremikovtzi also did not supply an independent audit certificate last year. The claim said that “The auditors were not able then to satisfy themselves that reported balances in the financial statements were properly recorded and valued.”