Serbia to open new tender to sell former US Steel unit this week.

By bne IntelliNews October 2, 2012
Serbia will open this week a new tender to find a strategic partner for troubled steel maker Zelezara Smederevo, economy and finance minister Mladjan Dinkic was quoted as saying by news agency Beta. Dinkic said that the negotiations for the sale of 75% of the company to a large Russian company are going to be wrapped up soon. The remaining 25% will stay in the hands of the Serb government. Dinkic said that the state will open a tender for Zelezara because of the strong interest expressed by the unnamed Russian investor to acquire the Serbian steel maker and even build some new capacities that at present do not exist at the Smederevo-based company. He added he believes the production at Zelezara will be restarted by end-2012. Zelezara has a 12% share in Serbia's exports and accounts for 5% of the country's industrial output but its production has been halted since July 10 because the company was unable to cope with the unfavourable global market prices and the lack of raw materials. According to Dinkic, the halt in production will have a negative impact on Serbia's trade balance, raising the current account deficit to a record 10% of GDP this year, he said. The government made an attempt to sell the company earlier this year after buying it back from US Steel for a token price of USD 1 at end-January. The tender, however, failed as none of the three interested companies filed an offer within the deadline. Russia's Ural Mining and Metallurgical Company, Luxemburg-based metallurgy holding United Pilsen and Ukrainian steel producer Donetskstal have indicated they are interested in Zelezara.

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