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Esmark makes only valid bid for Serbian steel mill

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The commission in charge of the privatisation said last week that US based flat-rolled steel processor and distributor Esmark is set to take over Serbia’s loss-making Zelezara Smederevo steel mill after submitting the only valid bid.

Mr Bojan Bojkovic, the head of the commission, said that the bid by Esmark Europe, part of Esmark Inc, was the only one of three bids to meet all conditions set by the tender.

Mr Bojkovic did not name the other bidders or give further details, but said the commission would study the offer in the coming days.

He said that “I expect the contract to be signed by January 30th or 31st.”

Serbia is trying to offload the loss-making plant as it seeks to rein in its budget deficit and public debt under a new loan deal with the International Monetary Fund.

Esmark’s bid represents the company’s first foray outside of North America since its founding five years ago.

Last month Serbia invited bids for an 80% stake in the mill, with the government offering to take on its USD 400 million debt to sweeten the deal. Zelezara, which has around 5,000 employees, swallows some USD 120 million in government subsidies per year.

Mr Dusan Vujovic, Serbian Finance Minister, addressing the same news conference, said that “Based on negotiations we had had with Esmark, I expect their bid will aim to maintain employment, to create added value and after that Zelezara should be able to cover all its expenses — gas, electricity, salaries.”

However, 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.

Source – Reuters

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Article Categories:
Metals · Steel

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