Privatization Agency refutes Esmark owner's statement

Privatization Agency refutes Esmark owner's statement

The Agency noted that the funds to the total value of USD 130 million and the USD 200 million working capital credit facility which Bouchard qualified as a part of the offer put forth by the U.S. company do not constitute new or fresh capital Esmark would invest in Zelezara.

During the talks in Pittsburgh last week, no agreement on 'previous provisions' were reached as Esmark stated in its release, the Agency told Tanjug.

It is a fact that certain progress was achieved in the talks, but Minister of Finance Dusan Vujovic made it clear to Esmark officials during the talks that their final offer would be discussed with Serbian Prime Minister Aleksandar Vucic, other members of the Serbian government and privatization commission of Zelezara Smederevo through the method of strategic partnership, the Privatization Agency explained.

We want to note that Esmark changed its offer on several occasions after the visit to Pittsburgh, especially with regard to the co-signature matters, corporate guarantees and minimum level of working capital, states the release.

The Agency particularly noted that Zelezara Smederevo should have invested USD 130 million in its capital assets from its own resources.

Ergo, this is not the money that Esmark would introduce to Zelezara Smederevo, it is rather a regular reinvestment from the plant's own funds with a view to ensuring uninterrupted production, the Agency noted.

In addition to this, the listed USD 200 million working capital credit facility would be ensured though a pledge in working capital and property Serbia is leaving in Zelezara (USD 170 million which Serbia invested at the beginning of operation) without any further guarantees from Esmark or its related legal entities from abroad.

This means that the funds are not fresh capital that Esmark would inject into Zelezara and it is instead provided by commercial banks on grounds of existing quality insurances.

Esmark never mentioned the USD 400 million worth of funds necessary for maintenance, spare components and the capital necessary for management and pursuit of operation in two blast furnaces, as we can only guess that this is only a rephrasing of the already listed funds, which in itself does not constitute an additional investment, the Agency said.

Having all these points in mind, the Privatisation Agency voiced its stand on Tuesday according to which Serbia has no economic interest and has not received the minimum legal protection put forth in the contract on strategic partnership with Zelezara Smederevo on conditions offered by Esmark, states the release.