Esmark Europe Declared Strategic Partner for Železara Smederevo Steel Works by Republic of Serbia
01/14/2015 - Esmark Europe BV, the European investment vehicle of Esmark Inc., announced that it has been officially notified by the Republic of Serbia that it has been selected as the winning bidder in the privatization process for the Železara Smederevo Steel Works.
Esmark Europe will now begin the process of finalizing the strategic partnership agreement with the Republic of Serbia to take a controlling 80.1% stake in Železara Smederevo. Esmark Europe expects to close the transaction by 1 February 2015 and immediately begin to implement its revitalization program.
The Železara Smederevo Steel Works facilities include two blast furnaces located in the village of Radinac, near Smederevo; a tin plate production facility in Sabac; and a raw materials production and processing facility in Dimitrovgrad.
In making the announcement Esmark Europe, BV’s chairman and CEO, James P. Bouchard, said, “We are absolutely thrilled that the government of Serbia has selected us as their strategic partner. The Republic of Serbia conducted a fair and transparent privatization process, and we received remarkable support throughout the pre-tender and diligence process. We share in the vision of Prime Minister Alexsander Vucic to return Železara Smederevo to its former glory as an economic engine for the Serbian economy. We look forward to finalizing this process and implementing our restructuring plan, and would like to thank the Selection Commission Head Bojan Bojkovic, Finance Minister Dusan Vujovic, the Železara Smederevo steelworkers and their union and other ministries, as well as U.S. Ambassador Michael Kirby for their support during the last ten months. We also extend our sincere thanks and gratitude to the Prime Minister and his entire government team.”
“Following the closing of the transaction our world-class management team will immediately turn its attention to executing our plan to revitalize Železara Smederevo and do everything we can to help stimulate the Serbian economy,” added Bouchard.
Bouchard emphasized that the company believes its strong balance sheet with more than US$350 million in equity and no short- or long-term debt, previous management experience in Europe, and operational expertise will be invaluable in repositioning Železara Smederevo Steel Works as an efficient, low-cost producer of steel and tin-coated products across Central Europe.
“With our collective management experience in revitalizing the Kosice, Slovakia steel mill, Železara Smederevo’s strategic location and access to low-priced raw materials, and the synergies afforded by its double-reduced cold mill and tin facilities and Esmark’s U.S. tin plate operations, we believe we have the right formula for success,” he explained.
As part of it commitment to the revitalization plan, Bouchard reaffirmed his previous statements that Esmark Europe would invest approximately US$400 million over the next five years for working capital, capital improvements and other investments; and an immediate infusion of US$28 million this year to repair and modernize the steel mill’s second blast furnace, steel shop and sinter plant. Esmark Europe expects the blast furnace upgrades will complement the mill’s new state-of-the-art, US$80 million pulverized coal injection plant. The company also pledged to maintain Železara Smederevo Steel Works’ workforce of approximately 5,000 employees as a result of its restructuring and production plan.
Bouchard and key management team members will travel to Belgrade this week to begin finalizing documents with government officials for the sale and purchase of the steel mill assets.
Headquartered in the Netherlands, Esmark Europe BV is a newly formed company and the European investment vehicle of Esmark Inc. chairman and CEO, James P. Bouchard.
Esmark Inc. is a diversified, privately-held family company with a portfolio of industrial companies with strong roots in the steel industry. Over the years, Esmark has diversified its interests and operations into a number of businesses engaged in the industrial and commodity sectors.
The Železara Smederevo Steel Works facilities include two blast furnaces located in the village of Radinac, near Smederevo; a tin plate production facility in Sabac; and a raw materials production and processing facility in Dimitrovgrad.
In making the announcement Esmark Europe, BV’s chairman and CEO, James P. Bouchard, said, “We are absolutely thrilled that the government of Serbia has selected us as their strategic partner. The Republic of Serbia conducted a fair and transparent privatization process, and we received remarkable support throughout the pre-tender and diligence process. We share in the vision of Prime Minister Alexsander Vucic to return Železara Smederevo to its former glory as an economic engine for the Serbian economy. We look forward to finalizing this process and implementing our restructuring plan, and would like to thank the Selection Commission Head Bojan Bojkovic, Finance Minister Dusan Vujovic, the Železara Smederevo steelworkers and their union and other ministries, as well as U.S. Ambassador Michael Kirby for their support during the last ten months. We also extend our sincere thanks and gratitude to the Prime Minister and his entire government team.”
“Following the closing of the transaction our world-class management team will immediately turn its attention to executing our plan to revitalize Železara Smederevo and do everything we can to help stimulate the Serbian economy,” added Bouchard.
Bouchard emphasized that the company believes its strong balance sheet with more than US$350 million in equity and no short- or long-term debt, previous management experience in Europe, and operational expertise will be invaluable in repositioning Železara Smederevo Steel Works as an efficient, low-cost producer of steel and tin-coated products across Central Europe.
“With our collective management experience in revitalizing the Kosice, Slovakia steel mill, Železara Smederevo’s strategic location and access to low-priced raw materials, and the synergies afforded by its double-reduced cold mill and tin facilities and Esmark’s U.S. tin plate operations, we believe we have the right formula for success,” he explained.
As part of it commitment to the revitalization plan, Bouchard reaffirmed his previous statements that Esmark Europe would invest approximately US$400 million over the next five years for working capital, capital improvements and other investments; and an immediate infusion of US$28 million this year to repair and modernize the steel mill’s second blast furnace, steel shop and sinter plant. Esmark Europe expects the blast furnace upgrades will complement the mill’s new state-of-the-art, US$80 million pulverized coal injection plant. The company also pledged to maintain Železara Smederevo Steel Works’ workforce of approximately 5,000 employees as a result of its restructuring and production plan.
Bouchard and key management team members will travel to Belgrade this week to begin finalizing documents with government officials for the sale and purchase of the steel mill assets.
Headquartered in the Netherlands, Esmark Europe BV is a newly formed company and the European investment vehicle of Esmark Inc. chairman and CEO, James P. Bouchard.
Esmark Inc. is a diversified, privately-held family company with a portfolio of industrial companies with strong roots in the steel industry. Over the years, Esmark has diversified its interests and operations into a number of businesses engaged in the industrial and commodity sectors.
