Chinese, Russian and South Korean investors reportedly eyeing US Steel Kosice

By bne IntelliNews July 28, 2016

Chinese, Russian and South Korean investors are eyeing US Steel Kosice, local media reported on July 27.

The Kosice steelworks could end up in the hands of Posco of South Korea, which  already cooperates with US Steel in the United States, reports SME, quoting analysts. The plant is the biggest employer in Slovakia, and is based in the unemployment blackspot around the second city Kosice in the east of the country.

Suffering from weak global steel markets, however, the US owner has been locked in fights with unions and the government over its plans for the plant. Prime Minister Robert Fico led bad-tempered talks with US Steel three years ago as it mulled a sale, finally tempting it to stay with incentives worth around €15mn over 15 years.

However, the problems continue. The Slovak government said in May that it could seek to buy a stake itself in a bid to prevent closure of the plant should US Steel seek an exit by selling to a "non-standard" owner.

Czech Moravia Steel was reportedly eyeing the plant last December. However, that lead appears to have gone cold.

SME reports that delegations from at least two potential suitors from the east have recently visited the plant. One was from Russia's Metalloinvest group, owned by oligarch Alisher Usmanov. The second was from an unnamed Chinese company, the newspaper claims. However, the report also suggests that South Korea's Posco, which already partners US Steel in a US joint venture, is also interested.

The rising speculation around the plant comes, ironically, a day after US Steel published improved guidance for full year results, noting that its European segment posted its best performance since the third quarter of 2008. 

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