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Bulgaria's Intertrust Metals Group Seeks to Raise $150 Million

By Elizabeth Konstantinova

July 20,2010

July 19 (Bloomberg) -- Intertrust Holdings AD, a Bulgarian metal producer that controls the Kardjali lead and zinc smelters, is seeking $150 million to upgrade its facilities and double output and sales, said Chairman Valentin Zahariev.
Smelter improvements at Intertrust's Olovno Tzinkov Komplex AD unit will be completed by 2013 and will help almost double annual sales to $220 million from $120 million in 2009, Zahariev, said in a July 16 interview in Sofia.
Bulgaria's Environment Ministry approved a 40 million-euro ($51.7 million) upgrade of the lead smelter a week ago and the company now has to raise the funding, he said. Intertrust is also building an 80 million-euro galvanized steel plant near Sofia on the site of an old pipe factory, with planned output of 600,000 tons of galvanized steel a year, he said.
"We need to raise a total of $150 million to complete our investment projects," said Zahariev. "We have applied for financing from U.S. funds for part of it. We will also consider other forms including an IPO, corporate bonds or bank loans. It all depends on the cost."
Intertrust has already borrowed 85 million euros in loans from Swiss banks to upgrade its zinc smelter, he said. Asturiana de Zinc SA, a Spanish zinc producer, designed the project and supplied the equipment, according to Zahariev.
Smelter Modernization
The modernized zinc smelter will increase output to 45,000 tons from 24,000 tons in 2009, while the lead smelter will double output to 60,000 tons from 30,000 tons, he said.
"The modernization of the two units will help cut pollution, reduce greenhouse emissions, improve the quality of all of our products, double output and cut costs," said Zahariev.
Zahariev ran Bulgaria's biggest steel mill, Kremikovtzi, before selling it in 2005 to Pramod Mittal, the younger brother of ArcelorMittal Chief Executive Officer Lakshmi Mittal.
Apart from the Gorubso mines in Madan in southern Bulgaria, Intertrust also runs five metal, tool and engineering plants in neighboring Serbia. The company exports 85 percent of its output mostly to Italy, Germany, Austria and Turkey, Zahariev said.
Zahariev forecast this year's output of Olovno Tzinkov Komplex at 20,000 tons of zinc and 19,000 tons of lead, 16 percent and 11 percent, respectively, less than in 2009, because of the ongoing upgrades.