MSC Bor expects a EUR 900 mil write-off of old debts – The remaining EUR 350 mil need to be returned

(Photo: Ralf Kleemann/shutterstock.com)

- Of the total EUR 1.25 billion debt of MSCB, the old debt is around EUR 900 mil and it was made prior to 2000. MSCB is not capable of returning the debts from the previous century and this needs to be clearly said. What it can and must do is to return around EUR 350 mil of loan debts for the new smelter and the purchase of mining equipment – said Spaskovski.

It was stated that on July 6 and 7 MCSB's creditors would be declaring their opinions on the Pre-Packaged Reorganization Plan (PPRP) for MSCB, which envisions the write-off of 90% of the old debt of the company and the payment of debts for which state guarantees or other securing measures were issued.

It was proposed for MSCB to continue its operations as a new business entity which would pay off 10% of its old debts to all unsecured creditors within eight years and to regularly pay off all its current obligations.

According to Spaskovski, of around EUR 900 mil of the old debt, nearly a half is owed to the London and Paris Creditors Clubs.

- The long-term loans for investments given by the Paris and London Clubs in the value of EUR 408 mil were used to buy equipment and facilities which are no longer functioning, just like the mine itself. Bor hasn't been operational for over 20 years – said Spaskovski.

He pointed out that MSCB hadn't been given any discounts relating to the arrangements with the Paris and London Clubs, since it wasn't state-owned nor did it receive money from the budget.

It was stated that part of the EUR 900 mil debt was the debt relating to copper delivery, that is, recovery of copper which had never materialized. Due to this, MSCB owed the Greek Mitilineos and Standard Bank London 9,000 tons of copper. The price of the “red metal” was USD 1,400 per ton at the time, whereas a ton is worth USD 4,600 nowadays.