Speculations about the sale of USSK continue

U.S. Steel allegedly wants €1.5 billion for its plant in Košice.

US Steel KošiceUS Steel Košice(Source: Courtesy of USSK)

Rumours about the sale of the steelmaker U.S. Steel Košice (USSK) have persisted, even though the steelmaker has not confirmed the so-far published information. Earlier this week the Sme and Hospodárske Noviny dailies reported that the Czech steelmaker Třinecké Železárny has submitted a bid to acquire the steelmaker in eastern Slovakia. Chinese steel giant the Hesteel Group was mentioned as another possible buyer.

“We do not comment on rumours,” said Ján Bača, spokesperson for USSK, as cited by the website biztweet.eu.

Read also:Rumours about the sale of steelmaker USSK re-emerge

Now, there are allegedly two investors interested in the USSK plant. One is Czech steelmaker Třinecké Železárny which belongs to the Czech-Slovak group Moravia Steel. The group is controlled by Slovak millionaires Tomáš Chrenek, Ján Moder, Evžen Balko and Mária Blašková. Allegedly, they submitted to U.S. Steel a bid for the purchase of USSK last Friday at its headquarters in Pittsburgh, the online version of Hospodárske Noviny reported, but it was turned down the same day.

U.S. Steel, based on information of Sme, does not want to sell the plant in Košice for less than €1.5 billion. Now it remains to be seen whether the Americans will make an abatement or whether potential buyers will increase their bids. Moravia steel allegedly offered €1.3 billion and Hesteel about €1 billion, Sme wrote on December 7.

On the other hand, Hospodárske Noviny reported that Chrenek’s company offered €700 million, while it should have joined with a German company to increase the bid to €1.2 billion.

The Americans commissioned J. P. Morgan Chase bank in the middle of 2016 to find a buyer for USSK, the Trend economic weekly reported earlier this year.

Chrenek, who chairs the Moravia Steel supervisory board, refused to answer questions about the bid for USSK last week.

“Mr Chrenek is not interested in answering your questions,” Chrenek’s spokesperson Radka Miloševská wrote to Sme on December 2.

With the acquisition of USSK, Moravia Steel would extend its existing product portfolio by flat products from USSK also used in the automotive and electronechnical industries. Třinecké Železárny specialises in production of rails and steel for construction and machinery industries.

The state-owned Hesteel Group is, after the European-Indian conglomerate ArcelorMittal, the second biggest producer of steel. The Chinese company already owns one steelmaker in Europe – Železara Smederevo with 5,000 workers in Serbia.

U. S. Steel owned this steelmaker in the past, but it returned it to the Serbian government, which later sold the plant to Hesteel for €46 million.

“Smederevo and Košice are plants that can complement each other excellently,” stated Slovak businessman Peter Kamarás for the Denník N daily. Kamarás negotiated the sale of the Serbian steelmaker to Hesteel.

Kamarás listed among the advantages of USSK its strategic location as well as the method of transporting iron ore to the plant.

U. S. Steel does not comment on the information about the sale. The company is listed on the New York stock exchange and thus it must first announce any sale of assets to its own investors and shareholders. The U.S. Securities and Exchange Commission has not received any announcement yet, Sme wrote.

Slovak government has no information about the possible sale

The Americans are not selling USSK at the moment, and there is no reason to panic, said Economy Minister Peter Žiga (Smer-SD) in response to the rumours about the bids.

“We have a very fair relationship ... we’ve got a memorandum of understanding in which forms of cooperation and commitments were agreed,” said Žiga as cited by the TASR newswire. “I think that there is no reason to panic, or to believe in conspiracy theories and hoaxes like Monday’s.”

News that U.S. Steel is leaving might stir up panic, said Žiga, adding that nothing like this is happening.

“This firm employs 10,000 people who have their families here,” he said. “It is absolutely irresponsible [to write something like this]. We have such a good relationship that we also communicate unpleasant issues, and if something like this occurred, I am positive that we as the government would be the first to know about it.”

Americans wanted to sell USSK in the past

Třinecké Železárny made a bid to buy USSK last year, but the two sides failed to agree on a price at that time.

The Americans wanted to sell USSK already in 2013. To ward off their departure, the Robert Fico government offered them some help. USSK and the government signed a memorandum in which USSK promised to remain in Košice and maintain its employment levels until 2018, while the government promised to help cut the firm’s energy and environmental bills. In case the Americans sell USSK earlier, they will pay sanctions.

Steelmakers in Europe have been suffering from an inflow of cheap Chinese steel. But the division U. S. Steel Europe, to which also USSK belongs, has been generating profit in the long term, Hospodárske Noviny recalled.

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