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Schmögnerová says US Steel's second bid for VSŽ better

Finance Minister Brigita Schmögnerova said on October 15 that the second bid made by US Steel for a stake in Slovakia's largest industrial company, Košice steel maker VSŽ, is "incomparably more advantageous" than the company's first offer.

The American company came up with its second bid in mid-September after the cabinet rejected the first offer of $220 million.

Schmönerová said that Deutsche Bank, as the government's advisor for the restructuring of VSŽ's loans and selecting a strategic investor, would play a major role in deciding whether the US Steel bid would be accepted. She would not reveal financial details of the latest offer, although the daily paper Národná Obroda reported a US Steel official as saying the American firm wanted a majority stake in VSŽ.

The new US Steel bid has been submitted to VSŽ's creditors and the Slovak cabinet. It includes an initial cash injection and a programme of capital spending focussed on high-tech, high added-value production.

US Steel spokesman Thomas Ferrall said on October 14 that central Europe would be VSŽ's target market, while customers would include the automotive and construction industry, and makers of home appliances and electric engines. US Steel would keep about 17,300 of VSŽ's current 25,000-strong workforce, keeping layoffs at 6-7% per year.

A member of the USX Corporation, US Steel is the biggest steel producer in America, netting $364 million on sales of $6.283 billion in 1998.

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