CHICAGO "Red October" has joined the hunt for elezara Smederevo d.o.o., U.S. Steel Corp.s former operations in Serbia.
Russian steelmaker Volgograd Steel Works "Red October" JSC is expected to be among the "credible bidders" for elezara Smederevo, the Serbian government said in a release on its website.
The announcement came the same day that Serbian Prime Minister Aleksandar Vucic met with representatives of Red October, the Serbian government said. "The Serbian government will soon launch the process of privatization of elezara Smederevo steel works, and it expects that Red October will be one of the credible bidders," it said.
Vucic stressed the importance of preserving jobs and "the continuity of work" at Serbias only producer of steel and steel alloys.
Red Octobers interest comes as the Serbian government said it is ready to write off all debts owed to the state by elezara Smederevo, according to a separate release. Getting rid of "dead debts" at restructuring companies such as elezara Smederevo would give Serbia the opportunity to be among the fastest-growing economies in Europe, Vucic said.
Sewickley, Pa.-based Esmark Steel Group LLC also is among the companies the Serbian government is considering as a buyer for elezara Smederevo (amm.com, Aug. 4). Esmark has conducted due diligence at elezara Smederevo, with representatives of the company visiting the facility earlier this year (amm.com, June 10).
Other potential buyers had been said to include a Russian steelmaker and a European private equity firm (amm.com, July 31).
Pittsburgh-based U.S. Steel sold elezara Smederevo to the Serbian government for $1 in 2012 (amm.com, Jan. 27, 2012). The Serbian flat steel producer, which idled its only operating blast furnace and its rolling operations in May while it negotiated credit lines with banks, recently restarted its steelmaking operations, relighting the blast furnace July 7 (amm.com, July 8).
elezara Smederevo has two blast furnaces and three basic oxygen convertors capable of producing 2.2 million tonnes of crude steel annually to be cast into slab and subsequently rolled into hot- and cold-rolled coil. The steelmaker also can produce tinplate at its Sabac Works.