Steel plant sale negotiations "not easy"

The business plan for Zelezara Smederevo steel plant needs be in line with the agreement with the IMF and with EU rules, says Zeljko Sertic.

Izvor: Tanjug

Tuesday, 20.01.2015.

14:45

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(Tanjug, file)

Steel plant sale negotiations "not easy"

Appearing on an N1 TV talk show said, Sertic said he had discussed the issue with Head of the EU Delegation to Serbia Michael Davenport two days before.

The economy minister said that negotiations with Esmark were underway and were "not in the least easy."

The government set out several criteria that a potential buyer has to meet – they have to be credible, have a minimum annual turnover of USD 300 million, have experienced and competent management, Sertic said, pointing out that Esmark met all those requirements.

We have embarked on negotiations on a business plan that would satisfy both Esmark and Serbia, and if we manage to negotiate the basic elements related to the Zelezara takeover by the end of January, the operational tasks at the enterprise should start by March or April, said Sertic.

On December 5, 2014, the Privatization Agency of the Republic of Serbia issued an invitation to tender for a strategic partner with a capital input in the steel plant, where the government is to preserve a 19.99 percent stake in Zelezara's ownership structure.

The current production at Zelezara is worth somewhere between EUR 300 and 320 million. At full capacity, it could go up to EUR 1.4 billion.

Zelezara Smederevo swallows about USD 120 million in government subsidies per year. Under a pre-membership deal with the EU, Serbia committed to reducing the state aid to Zelezara to minimum requirements by February 1.

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