Ispat takes over top Bulgarian steel mill

A unit of Indian steelmaker Ispat Industries took over Bulgaria’s largest steel mill, Kremikovtzi, after its representatives were voted to the Bulgarian firm’s supervisory board, a source close to the Indian company said. In April, Ispat signed a preliminary deal, worth an estimated $400 million in cash and future investment, to take over Kremikovtzi.

Monday’s move signalled Ispat’s Global Steel Holdings had acquired the 71 per cent stake previously held by Bulgarian Finmetals Holding, said the source, who was present at a Kremikovtzi shareholders’ meeting. ‘‘Changes in the supervisory board have been voted on …This means there is a deal,’’ said the source. ‘‘Global Steel Holdings Ltd has acquired the shares owned by Finmetals Holding in Kremikovtzi.’’ The source could give no other information, but the deal is expected to be officially announced later on Monday. Ispat’s unit has been in talks to acquire Kremikovtzi since last year and has sat on its management board since August.

It is expected to have paid around $100 million, or possibly a bit more, for Finmetals’ shares and has said it would invest another $300 million into the Bulgarian firm over three years after the takeover. Kremikovtzi, a former debt-ridden state-owned steel mill, was originally privatised for a token $1 in 1999. Global Steel Holdings’ takeover has been fraught with complications tied to that sell-off and issues related to Bulgaria’s struggle to meet stricter environmental restrictions required by the European Union, which the country hopes to join in 2007.