Six companies bid to manage steel plant

Six companies bid to manage steel plant

Bojkovic told state-run Radio Television of Serbia (RTS) that the seven companies had paid the participation fee of EUR 10,000, but only six of them had sent their official proposals for a contract to manage Zelezara, which meant that not all seven would be considered.

He refused to name the companies, but said it was "essential that there were several interested parties and that all of them were from the steel sector."

The goal is to have the steelworks running at its full capacity, to keep all 5,000 employees in their jobs, and to light the second blast furnace in order to maximize production and make the factory profitable, he said.

“This will be a transition period towards a long-term solution, and that is privatization,” said Bojkovic.

The plan is to first sign a contract for a set period, and most likely, the companies that have applied to manage the plant will want to take part in the privatization process as well, he said.

“But every company has its own vision,” said Bojkovic.

The deadline for submitting proposals for cooperation and concluding of a management services and business advisory contract with Zelezara expired at midnight Friday.

Serbian Prime Minister told reporters Friday that the final decision on the selection of the team to manage Zelezara would be made over the following five or six days.

“We will have a committee sit from Tuesday to Thursday and in five to six days, we will have the final decision reached,” Vucic said.

According to the prime minister, if the proposals meet the requirements set out by the government, the entire procedure could be completed by March 12 or 13.

Zelezara Smederevo should be run by a team of 12 directors, and when it is formed, it will need to provide an initial indicative business plan touching on the sales strategy for Zelezara and projections concerning prices for its key final products, production plan, procurement strategy, operating cost optimization, financing plan and employment levels.

The team of directors will have to maintain production at a minimum annual level of 1.5 tons of steel.

The team will manage Zelezara until the end of the privatization process. In case the next privatization tender fails like the last one, the steelworks will file for bankruptcy.

The current production at the plant is between 340,000 and 350,000 tons of steel, and the maximum production level is 2.2 million tons.