Serbia has accepted a bid by US based steel producer and distributor Esmark for the country’s sole steel mill, state owned Zelezara Smederevo, but details are still to be negotiated
The government said in a statement following a cabinet meeting on Monday “The government decided to accept Esmark’s bid.”
Neither party has made public how much Esmark offered for an 80% stake in the loss-making plant, which employs 5,000 people and costs the state USD 120 million per year in subsidies.
Esmark expects to spend USD 400 million over five years to upgrade the facility and USD 28 million right away.
Privatisation officials say they expect the deal to be wrapped up by the end of January
Bojan Bojkovic, the mill’s finance chief who headed the privatisation commission overseeing the process, said more details of Esmark’s bid would be announced later
Esmark Europe, part of US based Esmark Inc, was named on Friday as the only valid bidder for the mill in the town of Smederevo, around 50 km south of the capital Belgrade.
The mill was run by US Steel from 2003 until 2012, when the government bought it back for USD 1 to avert its closure and the loss of thousands of jobs as operations suffered from weak steel prices and subdued demand. The mill is operating only one of its two furnaces and losing USD 10 million a month. Železara Smederevo Steel Works, includes two blast furnaces, a tin-plate fabrication facility and a processing plant.
Source – Reuters
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