British-Indian steel group Ispat, which plans to take over Sidex Galati, entered a black list drawn by the US Trade Department, also including other companies charged with dumping practices.
The Trade Department announced that it would levy protective customs taxes against the products supplied by Ispat, SAIL, Essar, TATA and Gindal from India, PT Krakatau from Indonesia, Saldanha, Iscor and Highveld from South Africa and SSI from Thailand, after having taken similar measures against steel imports from Argentina last month, reports PRNewswire, quoted by Mediafax.
Beside these five states, there are another five countries that allegedly charge prices not compliant with the legislation of steel trade when they export steel to the US. These are China, Kazakhstan, Romania, Taiwan and Ukraine.
Last November, Weirton Steel Corp., America's eighth-largest steel company, together with another four steel makers and two trade unions, filed a lawsuit against these countries, claiming that they grant certain incentives to steel producers that contradict trade legislation.
Weirton Steel President and Executive Manager, John Walker, stated that the decision of US authorities proves that the intervention of the Washington administration in the lawsuit Weirton filed against these five countries is necessary.
"The decision of the Trade Department is encouraging. The officials considered that the governments of these states have broken trade regulations at a global level. Moreover, their actions impede the activity of domestic steel producers," Walker said.
LNM Holdings Ispat is currently in talks with Romanian authorities in order to purchase the industrial giant Sidex. The first negotiation meeting is scheduled for today.
According to some sources, Ispat allegedly offered 400 million dollars for Sidex. The amount includes investments in environmental projects and working capital (100 million dollars) needed by the Romanian steel mill.
Sidex's situation is quite intricate as a debt for equity swap would turn several state institutions (such as Finance Ministry, Labour Ministry, and Health Ministry) in Sidex shareholders.
Last year, Isarescu-led Government approved a debt for equity swap decision, but it has not been enforced yet. The Privatisation Authority currently holds a 74.1% stake in Sidex, but, if debts turn into shares, its stake would significantly decrease.
Sidex debts currently amount to 23.000 billion lei, about 900 million dollars. The company registered losses of 7.774 billion lei on December 31, 2000.
However, Sidex posted 211 billion lei in profits derived from exploitation. The current financial balance points out 1.057 billion lei in losses, due to the negative influences of the exchange rate gap, the decrease of steel products prices and the payment of due interest rates.
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