NEWS

Serbia not giving up on steel plant sale - PM

Friday, Feb 20, 2015

Serbia said on Thursday it had not given up on selling its sole steel plant, after the collapse of a deal with U.S. group Esmark hurt efforts to rein in state spending under a new loan agreement with the International Monetary Fund.

The Tanjug state news agency quoted Prime Minister Aleksandar Vucic as saying his government hoped to revive the privatisation of Zelezara Smederevo in a year or two.

On Tuesday, Vucic said his government had been unable to reach agreement with Esmark on the sale of the plant, which has been swallowing $120 million per year in taxpayers' money since 2012, when Serbia bought it back from U.S. Steel for $1 to avert its closure and save jobs.

The IMF must decide on Feb. 23 whether to endorse a 1 billion euro precautionary loan deal with the Balkan country.

Vucic said on Thursday his government planned to hire a professional management team to help increase production and return the plant to profitability, and eventually sell it.

The mill employs around 5,000 people and produces 340,000 tonnes of steel a year, way below its capacity of 2.1 million tonnes.

The new plan would need to be agreed with the IMF as the government had committed to cut subsidies significantly under the new loan deal. The EU candidate country also needs European Commission approval for the plan, given that a pre-accession agreement commits Serbia to end financing for its steel sector as of Feb 1.

 

Source : http://www.reuters.com/