U.S. steel firm Esmark, which saw a bid to buy Serbia’s only steel mill collapse last month, said on Tuesday it was interested in taking over management of the state-owned plant with a view to purchasing it by 2016.
The Serbian government is seeking a management team for the loss-making plant, with a view to reviving production and saving at least 5,000 jobs at risk if it is allowed to close.
The Zelezara Smederevo mill south of the capital Belgrade is operating at an annual loss of $120 million, and its fate is a key test of the government’s commitment to shrink the public sector and sell hundreds of loss-making state enterprises.
Esmark was the only valid bidder for an 80-percent stake in the plant but negotiations to close the deal collapsed last month when the government said it had not secured strong enough guarantees for the mill’s long-term future.
Nevertheless, Esmark said on Tuesday it believed it offered the best hope.
“Esmark is fully prepared to enter into a management services agreement to revitalize Zelezara Smederevo, with the ultimate goal to acquire the facilities on or before January 1, 2016,” Esmark head James P. Bouchard said in a statement sent to Reuters.
“Esmark incurred more than $3 million (USD) in due diligence and business planning expenses at no cost to the Serbian government during this process, as well as placing our expert management team on the ground in Zelezara and activating our global raw materials procurement and commercial sales operations,” he said.
The statement said Esmark’s management team would “commit to remaining at the plant for at least eight more months under Serbian ownership while working on a definitive agreement to assume operating and ownership control of the facility on or before January 1, 2016.”
Source; Reuters
