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VSŽ shuffles management

An extraordinary general meeting on February 19 at Slovakia's biggest company, troubled steel maker VSŽ, made several changes in its management.
VSŽ said in a statement on February 22 it had accepted the resignation of board member Thomas Graham, a former president of USX Corp's US Steel. Shareholders voted in John Goodish, who served as president of USX Corp's subsidiary United Engineers and Consultants from 1997 to 1999.
The meeting also accepted the resignation of supervisory board chairman Alexander Rezeš for health reasons. Štefan Šulek, director of construction company Hutny Projekt Košice, and Dušan Štefanik, member of the board of Hutnik a.s., were voted onto the supervisory board.


Alexander Rezeš (right) resigned from the VSŽ Holding Board on February 19 for health reasons, said the company in a statement.
photo: TASR

An extraordinary general meeting on February 19 at Slovakia's biggest company, troubled steel maker VSŽ, made several changes in its management.

VSŽ said in a statement on February 22 it had accepted the resignation of board member Thomas Graham, a former president of USX Corp's US Steel. Shareholders voted in John Goodish, who served as president of USX Corp's subsidiary United Engineers and Consultants from 1997 to 1999.

The meeting also accepted the resignation of supervisory board chairman Alexander Rezeš for health reasons. Štefan Šulek, director of construction company Hutny Projekt Košice, and Dušan Štefanik, member of the board of Hutnik a.s., were voted onto the supervisory board.

The changes came only a day after Hutník President Jaroslav Gruber met for talks with Prime Minister Mikuláš Dzurinda in Bratislava. Gruber told the daily paper Národná Obroda that "the state at the moment controls about 25% of VSŽ shares. I think it's in our common interest to discuss the direction, development and future of the steelmaker."

The departure of Rezeš in particular marks another milestone in a bitter struggle for control of the steelmaker between the new cabinet and a group of former managers led by Rezeš and appointed during the reign of former Prime Minister Vladimír Mečiar. Cabinet members have accused Rezeš and his former colleagues of leading VSŽ into crisis, and since November have been considering ways to increase the state's share in VSŽ at the expense of the Rezeš group.

Economy Minister Ľudovít Černák told The Slovak Spectator on February 18 that "it's clear the money that went to cover the hobbies of Mr. Rezeš, like football, pretty women and fancy villas, came from the state budget, not from 'twenty years of hard work,' as Rezeš likes to say."

VSŽ ran into trouble after failing to meet a $35 million payment on a syndicated loan in October last year. VSŽ president Gabriel Eichler has said the company is holding talks with several foreign steel firms, including US Steel, on a potential strategic partnership.

Martin Kábat, an analyst with brokerage house Slávia Capital, said that Rezeš's decision to depart most likely reflected the fact that as a shareholder, "he is now in a minority position versus the state. There must have been a lot of pressure on him from the government to leave."

Kábat predicted that Rezeš would now concentrate on selling his stock to any interested investor. "Of course he's trying to sell. Why would he keep his stock? He knows the situation [at VSŽ], and he knows it's time to sell. It's now just a question of price."

Before VSŽ ran into problems, the company had bought various unrelated assets such as several newspapers, a football club and an airline. The new management has announced it will focus on collecting VSŽ's overdue receivables and selling assets that are not part of its core business of steel making.

Shareholders agreed to change the company's name from VSŽ Holding back to VSŽ a.s. A VSŽ official said the change was meant to reflect the new management's strategy to focus on steel making.

Reuters contributed to this article

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