Serbia Government Has 3 Interested Bidders for Steel Plant

Ukraine’s Donetskstal-Metallurgical Plant, Russia’s Ural Mining and Metallurgical Company Co OJSC and Luxembourg-based United Group SA may bid to become a strategic partner for Serbia’s only steel plant Zelezara Smederevo d.o.o.

The Luxembourg-based holding United Group comprises Pilsen Steel Sro and Baummash OJSC. The three companies applied for tender documents on April 27, said the government in an e-mailed statement today.

Serbia has set a May 4 deadline to select the new strategic partner for the unprofitable plant, which works at half capacity of 2.2 million tons of crude steel a year and which the government bought back in January from U.S. Steel Corp. for $1.

Qualifying bidders need to be involved in mining, minerals, steel or similar businesses and with 2012 revenue of more than 1 billion euros ($1.32 billion).

Steel exports fell 63 percent in the first quarter of 2012, compared with the same period a year earlier, to 88.4 million euros, according to foreign trade figures released by the statistics office today.

Serbia is trying to avoid a second recession in three years as the nation prepares to vote for a new president, parliament and local governments on May 6.

Prime Minister Mirko Cvetkovic’s cabinet, fighting for re-election, ends its term in office with an unemployment rate of 24 percent and the dinar at its lowest in a decade.

U.S. Steel bought Serbia’s sole steelworks for $23 million in 2003 and sold it back to the government in January as it could no longer cope with weaker-than-expected recovery in the Balkan region and pressure from low-priced imports.

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