Russian company likely to buy Serbian steel mill identified

MOSCOW Russian state-owned company Uralvagonzavod (UVZ) is in talks with the Serbian government about buying the Smederevo steel plant. This was confirmed by its CEO Oleg Sienko, who spoke for the Moscow-based daily Kommersant. Russian company likely to buy Serbian steel mill identified He said a definitive decision about the purchase had not been made. Sienko said the Smederevo mill had the potential for cooperation with UVZ. Kommersant's sources said the negotiations got complicated after the Serbian government published a tender looking for a strategic partner for the steel mill. UVZ was considering a deal in which this unprofitable factory, whose capacities are objectively very dated, would be turned over to them practically for free, and then UVZ would invest into starting up production and modernizing the company, said the source, adding the Russian company had no intention in bidding at the tender. UVZ meets the criteria laid out in the tender, as the company's turnover last year totaled USD 3 billion, adds the paper. According to Kommersant, there are no other obvious potential buyers from Russia for the Serbian steel mill. On October 8, the Serbian Ministry of Finance and Economy published a tender for a strategic partner for Zelezara Smederevo that would ensure continuity of operation and development of the company. Zelezara (steel mill) Smederevo, previously known as Sartid, and after bankruptcy and privatization, was sold to Americans and changed its name to U.S. Steel Serbia in 2003. In January this year, the Serbian government bought the plant at a symbolic price of one U.S. dollar, after U.S. Steel announced it was withdrawing due to huge losses and the decline in the price of steel on the world market. On April 18, the Serbian government issued a tender looking for a strategic partner, with May 4 as the deadline for submitting bids. The deadline was extended first until June 11, and then until September 10. Three companies took part in the bidding - Ural Mining and Metallurgical Company from Russia, United Plzen based in Luxembourg, and Donetsk Steel Group from Ukraine, but the tender was unsuccessful. Due to lower demand on the domestic and foreign market, production at the Smederevo mill was temporarily suspended in early July, and one of the government's most urgent tasks is finding a long-lasting solution for the company. Tanjug Kommersant

Russian company likely to buy Serbian steel mill identified

He said a definitive decision about the purchase had not been made.

Sienko said the Smederevo mill had the potential for cooperation with UVZ.

Kommersant's sources said the negotiations got complicated after the Serbian government published a tender looking for a strategic partner for the steel mill.

UVZ was considering a deal in which this unprofitable factory, whose capacities are objectively very dated, would be turned over to them practically for free, and then UVZ would invest into starting up production and modernizing the company, said the source, adding the Russian company had no intention in bidding at the tender.

UVZ meets the criteria laid out in the tender, as the company's turnover last year totaled USD 3 billion, adds the paper.

According to Kommersant, there are no other obvious potential buyers from Russia for the Serbian steel mill.

On October 8, the Serbian Ministry of Finance and Economy published a tender for a strategic partner for Zelezara Smederevo that would ensure continuity of operation and development of the company.

Železara (steel mill) Smederevo, previously known as Sartid, and after bankruptcy and privatization, was sold to Americans and changed its name to U.S. Steel Serbia in 2003.

In January this year, the Serbian government bought the plant at a symbolic price of one U.S. dollar, after U.S. Steel announced it was withdrawing due to huge losses and the decline in the price of steel on the world market.

On April 18, the Serbian government issued a tender looking for a strategic partner, with May 4 as the deadline for submitting bids.

The deadline was extended first until June 11, and then until September 10.

Three companies took part in the bidding - Ural Mining and Metallurgical Company from Russia, United Plzen based in Luxembourg, and Donetsk Steel Group from Ukraine, but the tender was unsuccessful.

Due to lower demand on the domestic and foreign market, production at the Smederevo mill was temporarily suspended in early July, and one of the government's most urgent tasks is finding a long-lasting solution for the company.