The government confirmed the sale of a 55.35% stake in the Slovenska industrija jekla (SIJ) steel group to the Russian industrial group Koks for EUR 105m, wrapping up the biggest privatisation procedure in years
The government on Thursday, 1 March confirmed the sale of a 55.35% stake in the Slovenska industrija jekla (SIJ) steel group to the Russian industrial group Koks for EUR 105m, wrapping up the biggest privatisation procedure in years.
The state has given SIJ value added by joining it with a company whose main activity is the production of inputs for the steel industry, Economy Minister Andrej Vizjak told the press.
He said vertical integration was crucial for development, as SIJ was very sensitive to all fluctuations in prices of raw materials, energy and products.
Koks was selected in an international public competition that opened in September. Three bidders submitted binding offers, one of which was incomplete.
The main selection criteria were market expansion, preservation of production and jobs, willingness to invest and the content of the business plan. The offer made by Koks was by far the best, Vizjak said.
The commission for the privatisation of SIJ valued the company at between EUR 99.81 and EUR 191.64 per share, while Koks offered EUR 190.73 per share.
Koks pledged to invest some EUR 250m over the next three years and keep the same number of employees in that period.
The state is retaining a stake of 25% plus one share in SIJ. Vizjak said Koks would offer the same price to the remaining shareholders.
SIJ director Tibor Simonka was also pleased. "We are very happy with the selection of Koks as well as the negotiated guarantees and other provisions of the contract."
According to him, the two companies are complementary and the arrival of Koks provides to the best possible extent the conditions for the implementation of strategic plans until 2012.
The arrival of private capital will enable SIJ to speed up the implementation of a comprehensive investment cycle that is essential to competitiveness and stable development, he said.
According to SIJ, Koks is a group of 15 industrial companies involved mainly in the production of coke and metals as well as coal mining. Its net profit for 2006 is estimated at EUR 171m, with sales at EUR 1.69bn.
The SIJ group includes 14 companies, the core companies being Acroni Jesenice, which makes high-end flat steel products, and Metal Ravne, which specialises in the manufacturing of high-speed steels and certain special and construction steels.
In December the group projected year-end sales of EUR 542.8m, up 16% over the year before. However, profit was expected to drop by 34% to EUR 23m.
Source: Slovenian Press Agency STA
Author: STA, Slovenian National Press Agency