Bloomberg News

Serbia Is Close to Sale of Stake in Zelezara to Russian Investor

September 26, 2012

Serbia is close to agreeing the sale of a majority stake in its sole steel mill Zelezara Smederevo d.o.o. to a Russian investor, Prime Minister Ivica Dacic said.

“We are very close to striking a deal,” Dacic told reporters in Belgrade today after meeting the Russian company yesterday. “This is a big Russian company, which has been interested in Zelezara for months and they want their identity disclosed once they agree to sign a memorandum of understanding.

The government has been trying to find an investor for Zelezara Smederevo since January, when Serbia bought it back from U.S. Steel Corp (X:US) who gave up the unprofitable plant.

The Russian company wants to manage Zelezara and invest around 100 million euros ($129 million) with the government retaining between 20 percent and 30 percent in the mill, Dacic said, adding that this is not ‘‘a done deal yet.’’

Serbia wants to lure industrial investors as the economy slows and the government tries to halt a further increase in unemployment, already at 25.5 percent.

Dacic said the government will start overhauling the public sector overhaul and introduce ‘‘more flexible’’ labor contracts and curb ‘‘unnecessary public spending.’’

Serbia will talk to the International Monetary Fund ‘‘not because we need their money, but because we need them as a proof they support our policies,’’ Dacic said.

The lender said this month it would be monitoring Serbia’s progress in reducing the deficit and changes to central bank law before agreeing to a new loan deal.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • X
    (United States Steel Corp)
    • $45.19 USD
    • -0.81
    • -1.79%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus