A Russian company will attempt to do what the American investors failed to achieve in Romania: turn Combinatul Siderurgic Resita (Resita Steel and Iron Plant - CSR) around. The Russian metallurgical group TMK is the only bidder for the last large state-run company in the steel and iron industry, Combinatul Siderurgic Resita. The State had initially tried to sell the plant to American investors, but the privatisation failed.
The Russians submitted their bid through a subsidiary of the group, Sinara Handel. TMK Group is the leading pipe maker in Russia and the second top producer in the world. Its only productive facility outside the Russian Federation is Artrom Slatina.
TMK has recently announced it is planning to establish a metallurgical holding comprising a number of Romanian companies. The acquisition of CSR would get the Russians a raw material source to use for making pipes in Romania, which is the group's core business. The group representatives have already said that after taking over CSR, they might buy the controlling interests in another pipe maker, Republica Bucharest.
TMK is the main supplier for oil and natural gas companies Gazprom, Yukos, LukOil, and Transneft on the Russian market and its international clients include Exxon, Agip and Mitsui.
CSR's former owner, US-based Noble Ventures sued the Romanian State on the grounds of expropriation.
The Americans filed for $320 million in damages, with the case pending ruling by World Bank's International Centre for Settlement of Investment Disputes (ICSID) in Washington. The Romanian party, which says the Americans failed to comply with the privatisation contract retained White & Case (US) and Musat & Asociatii (Romania) law firms to defend them in this case. The court should deliver the ruling next year. The Privatisation Authority (APAPS) representatives say the plant's privatisation will not be impeded in the event the court finds against the Romanian State.
The main Romanian steel and iron plants have been taken over by Indian and Russian investors over the last two years. vlad.nicolaescu@zf.ro
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