LNM consolidates Romanian portfolio, buys Siderurgica and Petrotub

LNM Group, the world’s second-largest steel group, has added another two companies to its Romanian portfolio. Thus, the group controlled by the Indian businessman Lakshmi N. Mital, already holding Sidex Galati and Tepro Iasi, became on Tuesday the main shareholder in another two Romanian plants, namely Siderurgica Hunedoara and Petrotub Roman. The total value of the two transactions was in excess of $120 million.

The purchase of about 70% in S.C. Petrotub S.A. for $83 million was the largest transaction. The Moldavian piping company posted losses totalling some 270 billion ROL (about $8 million) by August 30, 2003, whereas total debts amounted to 3,000 billion ROL (some $84 million).

According to the sale-purchase contract, the stake price, together with the technological and environmental investments account for more than half ($43 million) of the $84 million, while the commercial debts taken over accounted for the rest of $40 million. Besides, LNM Group agreed to keep the existing 3,000 employees and also pledged to have the company derive 70% of the turnover from the core business.

The second transaction closed yesterday saw the sale of more than 80% in steel mill SC Siderurgica Hunedoara, for $43.4 million. The transaction was actually worth $22.4 million, whereas the commercial debts taken over by the purchaser accounted for some 21 million dollars.

By the end of August 2003, Siderurgica Hunedoara had posted total losses worth 785.6 billion ROL ($23.8 million dollars) and cumulated debts amounting to 8,961.5 billion ROL (271.6 million dollars). Siderurgica logged a total loss volume amounting to some $160 million, with more than $20 million in operating losses. ionut.bonoiu@zf.ro