Bloomberg News

U.S. Steel May Take $400 Million Loss on Serbia Plant Sale

January 31, 2012

(Updates with closing share price in fifth paragraph.)

Jan. 30 (Bloomberg) -- U.S. Steel Corp., the nation’s largest producer of the metal by volume, will take a loss of $350 million to $400 million in the first quarter on its planned sale of a plant back to the Serbian government.

The total charge will be as much as $450 million, including about $50 million from a foreign-exchange adjustment related to its Serbian investments, the Pittsburgh-based company said in a statement today. The amount attributable to the plant sale was confirmed by Erin DiPietro, a company spokeswoman, in an e-mail today.

Serbian Prime Minister Mirko Cvetkovic said Jan. 27 that the government would repurchase the plant for $1 and start looking for another buyer. U.S. Steel bought the unit from the government for about $23 million in September 2003. The company said it will sell the plant for a “nominal” sum in a deal expected to close tomorrow.

Increasing demand from automakers and energy companies has helped raise steel prices in the U.S. in the past two months. Steel consumption this year will increase 5.2 percent in the U.S. this year and 2.5 percent in the European Union, with demand stalling in most European countries, the Brussels-based World Steel Association said in its October Short Range Outlook.

U.S. Steel, which is scheduled to report fourth-quarter earnings tomorrow, fell 3.8 percent to $28.73 in New York.

--Editor: Tina Davis

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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