USX Corp's U.S. Steel is interested in investing in troubled Slovak steel maker VSŽ, VSŽ president Gabriel Eichler said in the mid-March edition of the Slovak company's newsletter.
In an interview published in the newsletter Ocel Vychodu, Eichler said U.S. Steel had ordered an audit of VSŽ and sent a group of experts to review VSŽ's production facilities. "These are great costs that U.S. Steel would not incur if it wasn't seriously interested in a [capital] entry in VSŽ," Eichler said.
Recently, an extraordinary general meeting at the troubled steel maker replaced board member Thomas Graham, a former president of U.S. Steel, with John Goodish, another former senior manager at USX Corp. U.S. Steel is part of USX.
"I am convinced that U.S. Steel would make a great investor," Eichler said in the Ocel Vychodu interview.
VSŽ accounts for some seven percent of Slovak gross domestic product and 10% of exports. It ran into trouble after failing to meet a $35 million payment on a foreign loan in October last year.
Eichler, elected in December, has said VSŽ will focus on shedding its non-steel related assets and collecting overdue claims. He said in February that VSŽ was holding talks with several foreign steel firms including U.S. Steel and ISPAT International.The company expects to post a 5.0 billion Slovak crown ($143.2 million) loss for 1998.
A VSŽ spokeswoman told Reuters that no decisions on foreign strategic partners could be made until VSZ's creditor banks had reached agreement on how to handle the company's debt situation. "The agreement was expected on [March] the 12th, but it has been postponed for a week," she said.