There is still chance for Magnohrom – Is Austrian RHI again among potential partners?

(Photo: magnohrom.rs)

Representative of the state-owned capital at Magnohrom, Djordje Kosanovic, said that Kraljevo-based plant is far from bankruptcy and that it can get a strategic partner.

- The interest for the Factory of refactory materials and magnesite is already there and in the past few years we have had several interested investors – Kosanovic says.

The biggest chance for sale was in 2012 when the work with Austrian RHI should have ended. However, it is not included they will become interested again in Magnohrom apart from some other potential buyers, Kosanovic said.

He added it is expected that privatization of the Factory of refactory materials and magnesite mine is conduced based on the strategic partnership principle.

When it comes to the Factory for electro-thermal products, privatization will most likely occur through property sales, Kosanovic says.

In 2006, Global steel holding acquired Magnohrom and committed to conduct social program which implied that the workers would be paid three remaining salaries from 2011 and four from 2006 as well as to enable regular legal social program. Apart from that, Global steel committed to pour EUR 23 mil in Magnohrom in the next five years.

Only two months after the giant in production of refactory brick was sold, fast failure started. Indebtness and loans started first and after that production was slowing down since debts were increasing.

For somewhat more than half a year, Magnohrom was already forced to shut down the rotation furnace because gas was off due to debts. A few months after that, the plant left without electricity and water and all its sections stopped working and the employees, 2200 of them, stopped coming to work because salaries were not paid.

After strikes and protests of the workers in the streets of Kraljevo but also because Global steel did not maintain production or fulfilled social program and other provisions in 2008 the Agency for privatization terminated the sales contract.

Magnohrom has been in restructuring since then.