Sidex: it has a consultant, it has to find a buyer

It is very important for the investor that is to be designated as the consultant for the privatisation of Galati-based Sidex plant to be one of international renown, considering the quasi-monopoly position the Galati-based plant holds on the Romanian steel market, State Ownership Fund chairman Radu Sarbu said.

Sidex operates over 5 percent of total Romanian exports.

Michael McNutt with Deloitte&Touche stated that for the US consortium it is very important to find an investor that should not close down the plant in the wake of privatisation.

In line with the financial counseling contract, the consortium led by Fieldstone must draw up diagnostic, “due diligence” and evaluation reports for the company. They must present to the Government a preliminary evaluation of the market, including the detailed network of contacts established with potential investors, as well as the recommended privatisation strategy, including discussions referring to scenarios taken into consideration and the justification for recommendations that were made.

Sidex was originally included in the PSAL programme concluded with the World Bank for the privatisation of 64 commercial companies. Subsequently, a scandal was unleashed between SOF and the Transports ministry, which ended with the plant’s being excluded from the PSAL programme. This happened because, within the first stage, the selection commission did not point out any winner since it considered that investment banks’ technical and financial bids did not meet the percentages required in line with procedures settled by the World Bank, while the bank’s experts considered that the evaluation operated by the selection commission was too strict.

The shortlist of investment banks, respectively of consortia selected within PSAL for the privatisation of Sidex was made up of Credit Suisse First Boston, Commerzbank, IDOM Ingeniera y Consultoria SA, BMF Deutsche Bank AG, London Flemings, Bucharest Investment Group, CA IB Financial Advisers SA Bucharest, CA IB Investmentbank AG Vienna, Hoogovens Technical Services, Clifford Chance London, Fieldstone, Merrill Lynch.

Fieldstone Private Capital Group is one of the largest international investment banks within the steel domain. Since 1990, Fieldstone has managed to mobilise funds worth over 30 billion dollars, of which 700 million dollars within the American steel and iron metallurgy.

Deloitte&Touche Central Europe has offered counseling services in Central and Eastern Europe for a volume of transactions amounting to over six billion dollars.