Kremikovtzi Corp.

About Kremikovtzi Corp.

Kremikovtzi Corp. is the biggest steelmaking companies on the Balkan Peninsula. Its majority owner is the company Finmetals Holdings Corp. that was bought by Global Steel Holding Limited in August 2005. It has 71% of the issued joint-stock capital of the company while the state in the person of the Ministry of Economy and Energy maintains a minority stake of 25.29%. The company was founded in 1959 as Iron-and-steel works Kremikovtzi. The construction of the production powers started on 05.11.1960.

During the period of planned economy the initial objective of the works has been to contribute to the industrial development of Bulgaria by building and development of the ferrous metallurgy in the country. A good prerequisite has been the use of the available local iron ore deposits (Fe content of 29-37%) which has been the main reason for the selection of the works location.

The first production facilities were started in 1963. In the following 15 years additional installations were built, thus creating a vertically integrated structure, covering the full process from iron ore extraction to the production of finished steel products, as well as all the necessary auxiliary activities.

After The Trade Act was passed in Bulgaria Kremikovtzi was registered as a joint-stock company of initial capital of 720 363 000 BGN split in 720 363 shares each of nominal value of 1 000 BGN.

Subsequently, this capital was increased in December 1995 to 18 520 995 000 BGN (18 520 995 shares) after the revaluation of the fixed assets in accordance with State Decree No 179.

After the hyperinflation of 1997 the fixed assets were revaluated once again to 296 998 266 000 BGN which was achieved rather by changes in the reserve of the revaluation than by issuing of new capital.

During the process of mass privatization in 1996 and 1997 3.71% of the shares of the company were purchased by private investors. These shares were listed at the Bulgarian Stock Exchange.

On 19.06.1999 the privatization contract of 71% of the shares of the company was signed with Finmetals Holding Corp. In August 2005 Global Steel Holding Limited acquired the majority stake of Finmetals Holding Corp. in Kremikovtzi Corp.

In May 2006 The EU Commission appointed the independent consulting company IDOM to make an assessment of what was implemented under the Individual viability plan of Kremikovtzi Corp. The plan was approved by the EU and developed by Eurostrategy Consultants in 2003.