Bogicevic negotiates with Mittal, Kostic negotiates with Akhmetov on acquisition of Zelezara Smederevo

(Zelezara Smederevo)

Serbian businessmen Miroslav Bogicevic and Miodrag Kostic will try to persuade Lakshmi Mittal and Rinat Akhmetov, respectively, to buy Zelezara Smederevo, the media in Serbia announced.

Bogicevic, owner of the Farmakom concern, has earlier established good contacts with people at Mittal, the world's largest steel maker, which is run by Lakshmi Mittal and his brothers.

That was the reason for the highest representatives of the Serbian government to send Bogicevic to London, where Mittal's headquarters is based, Press daily writes.

Bogicevic's ultimate task is to persuade the Indian businessman to start negotiations with the Serbian government, which is intensively seeking a buyer for the Smederevo steelworks.

"Bogicevic was staying in London, where he had a meeting with Lakshmi Mittal's associates. That was the first, so-called preparatory meeting preceding Bogicevic's meeting with Mittal, who accepted to meet with our businessman. The exact date of that meeting will be known very soon," the daily cites its source as saying.

Mittal is run by Lakshmi and his two brothers - Pramod and Vinod. All main decisions are made by Lakshmi, who is also the world's fifth richest man, with the wealth estimated at USD 25 billion. Mittal annually produces over 20 million tonnes of steel across Europe, Africa and India.

However, the economic crisis has not bypassed this leading steel maker, which announced downsizing at seven of its plants until the end of 2012. Bad news came few days ago as well, when over 100 workers stormed the offices of the management of Arcelor Mittal in northeast France, protesting against plans for further shutting down of blast furnaces at that plant.

In the Serbian market, Mittal has not proved to be the best solution for the workers of Kraljevo-based Magnohrom, which was bought by the Indian company in 2006. That privatization is remembered for very bad management, and the whole thing was ended with the termination of the sales agreement by the Privatization Agency.

Akhmetov called by Tadic, Janukovich and Kostic

At the same time, as Blic daily writes, the richest Ukrainian Rinat Akhmetov is talking not only with the presidency of Serbia, but also with businessman Miodrag Kostic, president of MK Group, which has been operating in Ukraine for more than five years.

Blic cites its source as reminding that Kostic's company cultivates 30,000 hectares of fields in Ukraine, where he is deemed a successful businessman. Since 2006, he has invested EUR 35 million in the country, and his company Agro-invest has recently opened the biggest silo in Ukraine, worth USD 20 million.

"It can be even said that Kostic and Rinat Akhmetov, owner of FC Shakhtar Donetsk, are friends. That is why the Serbian government came to an idea to ask the owner of MK Group for help in finding the buyer for the steel mill in Smederevo", the daily cites the same source.

Possible strategic partnership between Akhmetov and the steelworks in Smederevo is also in the hands of Serbian President Boris Tadic and Ukrainian President Viktor Janukovich. Immediately after the Americans left U.S. Steel Serbia, Tadic had a meeting in Belgrade with Akhmetov's closest partner, the man who runs all businesses for the Ukrainian businessman.

As Blic reports, a possible cooperation was previously agreed upon by the two presidents, and Janukovich asked the Ukrainian football king, who also owns several steel mills in Europe and Ukraine, for help. Akhmetov, allegedly, did not rule out the possibility of buying the Smederevo steelworks, but there are certain obstacles.

The Ukrainian steel king wants to buy Zelezara Smederevo, but under the condition that he gets a green light to merge it with the steelworks in Kosice in Slovakia, which is still run by U.S. Steel. In that way, he would push the Americans from Slovakia and the entire European steel market. For the same reason Akhmetov is interested in taking over Niksic-based steel mill, the bids for which have already been invited.

Akhmetov (45) owns several steel mills in Europe. In 2010 his plants produced 35 million tonnes of iron, registered revenues of USD 9.4 billion and had 130,000 employees. He is also the owner of over 100 companies in the fields of metallurgy, mining, finance, telecommunications and agriculture. Experts claim that his company is one of the most significant steel makers in the EU and a serious trader in electricity.