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The Government of the Republic of Serbia

In the service of citizens

No agreement reached with Esmark over Smederevo steelworks

Belgrade, 17 February 2015

Prime Minister Aleksandar Vucic said today that the government at its session today adopted a decision not to sign a contract with the US company Esmark on the takeover of the Smederevo Zelezara steelworks.

At an emergency press conference, Vucic said that the real reason for rejecting the offer is that we received no guarantee that Zelezara will continue to work after its reserves of raw materials are exhausted.

We did not get a guarantee that Zelezara's working capital will be preserved and that the raw materials whose current value is at $170 million will be consumed, the Prime Minister said.

The government will on 23 February start implementing a plan to select a management team through a public call, in order to hire the best managers for the steelworks and in order to put into operation the second furnace later this year.

I expect that the plant will start working with an increased capacity by the end of March, he said, expressing confidence that we will be able to find a partner who will help this company be the pillar of Serbian economy.

The Prime Minister pointed out that the decision not to enter into the contract with the US company was made in consultation with the privatisation adviser and the Commission for the strategic partnership model, adding that this decision was very difficult for the government of Serbia.

We spent several months working to save the plant which was the engine of the Serbian industry, to increase the GDP and to implement severe measures in the field of fiscal consolidation for Serbia to finally become a healthy economy, the Prime Minister stressed.

According to Vucic, our country has fulfilled all obligations to the International Monetary Fund (IMF) and the IMF has been notified about the outcome of the negotiations.