Russia's TMK interested in CSR

TMK Group, the leading piping maker in Russia and owner of Artrom Slatina is interested to buy the controlling interests held by the State in Combinatul Siderurgic Resita (Resita Steel & Iron Plant – CSR) and include the plant in a holding comprising several Romanian companies.

“Two years ago we bought the controlling interests in Artrom Slatina and its debt to the Banking Assets Resolution Authority (AVAB) (…) We decided to keep investing in Romania, so that we could establish a metallurgical holding based in Bucharest,” TMK’s general manager Dimitri Pumpianski told a news conference in Bucharest on Saturday.

CSR and Artrom Slatina should be the founders of this holding, with representative of the group run by Russian business people not ruling out further takeovers in Romania.

TMK early this year stated its interest for taking over CSR along with piping maker Petrotub Roman, but gave up buying the latter, following Privatisation Authority’s (APAPS) announcement that Petrotub would be sold together with Siderurgica Hunedoara, in which the Russian group was not interested.

CSR is supposed to supply Artrom with raw material. Pumpianski specified the two entities would work closely with companies like Petrotub Roman or Silcotub Zalau.

According to TMK’s general manager, CSR needs urgent investments worth $30 million, which should be directed to vehicle insurance, retooling and completion of equipment installation.

TMK representative said the stated amount was just the first step of a “stable development” of the plant in Resita and that a strategic plan to develop CSR would be devised and followed by the necessary investments.

Privatisation Authority chairman Ovidiu Musetescu, who attended the conference, as well, said CSR’s legal situation was “very clear, as the State holds the controlling interests in it,” and that the lawsuit filed by the former CSR owner, US-based Noble Ventures with World Bank’s International Centre for Settlement of Investment Disputes (ICSID) would in no way be able to hinder the re-privatisation of the plant.

“We must not make any connection between CSR’s legal situation and the lawsuit in Washington (…) Whatever decision might be made in Washington (…) it will be of no consequence to the re-privatisation procedures for this company,” Musetescu explained. He added he estimated the lawsuit filed by Noble Ventures to last at least a year and a half.

The privatisation contract between CSR and Noble Ventures became void in December 2002, based on a provision in the document that stipulated CSR’s privatisation was to be cancelled in case two successive instalments were not paid, Musetescu explained.

CSR’s former owner sued the Romanian State in 2001, asking for $200 million damages. The American company later raised its claim to $330 million.

“I believe the misfortune of this company was a lesson to us all,” the APAPS official said. Mediafax