LNM Holdings-Ispat International is the only group to have submitted a bid for acquiring the huge Romanian steel mill Sidex Galati and Privatisation minister Ovidiu Musetescu yesterday stated that negotiations will be kicked-off with the sole bidder.
The other companies and consortia that had displayed interest in Sidex privatisation, buying the task book, did not submit any bids by April 4.
Sidex task book had been purchased by four consortia: Ispat International, a Romanian group of trade companies including Metanef, Grivco, Metalexportimport and Metaltrade, a European group made up of French Usinor, Turkish Erdemir and German Salzgitter, and TNK Kaz Chrome, a financial conglomerate with Russian connections.
The Romanian consortium motivated its withdrawal saying that some conditions had changed in the meanwhile, but the other three groups failed to state their reasons for leaving the race for Sidex.
"The most important reasons that made the Romanian consortium withdraw were the state's intervention at the macro-economic level after Sidex privatisation, through its regulations on prices on the domestic market, the lack of anti-dumping measures for the import of metallurgical products in Romania and the change of some major data, with a large influence on the offer's content, nine days before the deadline for bid submitting," the Romanian consortium stated.
After the merger with Luxembourg-based steel mill Arbed and the Spanish Aceralia, Usinor turned to be the largest steel group in the world. Usinor intended to take over only Sidex management and then decide whether to purchase the steel mill after two years.
Sidex sale will actually be a political decision, given the privatisation's economic and social implications. The transaction will be closely monitored by the EU, as Western Europe is a large steel importer. There is a tough competition between Ispat and the European companies operating in this field.
There is also a conflict on the international steel market, both economic, as steel companies are currently concerned with cost cuts, and political, as Western companies repeatedly accused the Eastern plants of allegedly unfair competition, coming especially from Russia, India and Southeast Asia.
Americans and West Europeans say their traditional markets are oversupplied with low quality steel products at dumping prices, as they are subsidised by Eastern European countries.
In Romania, the West-East dispute has triggered the competition between Usinor and Ispat for Sidex privatisation.
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