Talks with US Esmark on Serbia steel plant fail

GMT 21:46 2015 Tuesday ,17 February

Arab Today, arab today Talks with US Esmark on Serbia steel plant fail

The Zelezara Smederevo steel plant
Belgrade - AFP

Talks with US steel group Esmark over buying a majority stake in Serbia's sole steel plant have failed, Prime Minister Aleksandar Vucic said Tuesday.
"The Serbian government has decided not to sign the agreement with Esmark" to sell it an 80-percent stake in the Smederevo plant, Vucic told reporters.
Negotiations with Esmark, the only bidder for the majority stake in the unprofitable Serbian plant, had begun in October. The steel plant's losses last year amounted to 96 million euros ($109 million).
Vucic said the deal fell through because the government did not obtain certain guarantees "regarding the preservation (of production) and the management of current assets."
The government was to retain the remaining 20 percent stake in the plant.
Serbia has been looking for a strategic partner in the plant since US Steel withdrew in 2012.
The US steel giant, which bought the bankrupt plant for 33 million dollars in 2003, decided to pull out because of the global economic downturn.
The government then bought the plant, 40 kilometres (25 miles) east of Belgrade, from US Steel in January 2012 for the symbolic price of one dollar.
At the time, the government said its move to buy back the plant was aimed at preventing the loss of about 5,500 jobs and to keep it operating while a new long-term strategic partner was sought.
Since then, three previous tenders failed as none of the three initially interested companies -- Luxembourg-based United Pilsen, the Donetsksteel Group from Ukraine and Russia's Ural Mining and Metallurgical Company -- had made a formal bid.
Zelezara Smederevo, with annual capacity at about two million tonnes, is the Balkan country's main exporter.
It accounts for 14 percent of Serbia's overall exports.


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