Are you on the brink of bankruptcy? Do you have millions of dollars tied up into a project that seems destined to go belly up? Either way, LNM Holdings may be the solution to your problems.
After all, if this works for the Romanian State, why shouldn't it work for everybody? After having bought from the Privatisation Authority (APAPS) four companies that were headed for bankruptcy (Sidex Galati, Tepro Iasi, Petrotub Roman and Siderurgica Hunedoara), Indian group LNM Holdings, the world's second-largest steel producer, will also deal with the most disastrous project Romania has ever been involved in - the Krivoi Rog plant, where Romania has invested some 800 million US dollars since the mid '80s and got nothing in return.
The investment was to be recovered when the Romanian steel industry started using the iron ore pellets (raw material used to obtain steel) from Krivoi Rog, but the plant's construction was never completed and the investment remained fruitless.
There must be hopes to recoup at least part of the money since the Romanian State is about to authorise the Indian group to act on behalf of the Romanian Government during the talks for completing the Krivoi Rog investment.
"The Ministry of Economy and Trade, the Ministry of Public Finances and the Ministry of Foreign Affairs are hereby empowered to present LNM Holdings with an authorisation for representation. The company, which participates in the privatisation of the Ukraine-based plant, is hereby authorised to negotiate with the Ukrainian party, on behalf of the Romanian party, detailing the terms and conditions that need to be met for the construction works to be completed," according to a Government Decision published in yesterday's Official Gazette.
Ministry of Economy officials would not provide details about the project by press time, but Aditya Mittal, vice-president of the LNM Group told Ziarul Financiar that the company was indeed mulling involvement in the project.
"We are in constructive talks with the Romanian State, about representation in the Krivoi Rog project," Aditya Mittal said.
Romania and Ukraine will have to invest even more money in order to complete the construction of the plant, but the two parties have not agreed on the exact amounts of money and the financing sources, yet.
Also, it is not clear yet exactly how will LNM Holdings participate in the plant's privatisation, as Krivoi Rog is not a joint stock company yet.
LNM Holdings is now Romania's only solution, as Sidex Galati (owned by LNM) is the only Romanian-based plant that can use the iron ore pellets made in Krivoi Rog.
The Romanian State will thus try to retrieve part of the money from LNM Holdings, which could become both the owner and the main customer of the plant.
LNM has dominated the steel market in Central and Eastern Europe in the past few years, as the group has bought many of the steel mills in the area.
laurentiu.ispir@zf.ro
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