Jun 7 2004
The LNM Group, the world’s second largest and most global steel producer, today announces that LNM Holdings N.V. has been selected to enter into exclusive negotiations for the privatisation of BH Steel, Bosnia.
Negotiations with BH Steel’s current majority shareholders, the Government of the Federation of Bosnia-Herzegovina and the Kuwaiti Investment Agency, will commence shortly. The parties envisage negotiations to be successfully concluded within a 30 days period.
BH Steel has a current annual production level of 200,000 tonnes and produces a variety of long products, including forgings, bar and rod. LNM believes that the production capacity of BH Steel can be substantially increased by a series of targeted capital expenditures, hereby focussing restart of the integrated production route at BH Steel, commissioning of the electric arc furnace production, modernisation of the remaining facilities and essential improvement of the existing product portfolio.
This latest acquisition falls in line with LNM’s growing interest in the region and compliments the earlier achieved joint venture agreement with RZR Ljubija for the mining and development of the Ljubija iron ore mines.
The acquisition of BH Steel would further enhance LNM’s leading position in steel production in Central and Eastern Europe. LNM currently owns major steelmaking facilities in Poland, Romania, Czech Republic and Macedonia, following its recent acquisition of 2 facilities from Macedonia’s Balkan Steel.
Commenting, Aditya Mittal, Vice Chairman, LNM Holdings N.V. said:
“We are pleased to have been granted exclusivity by the Bosnian Government and Kuwaiti Investment Agency, and we are confident we can come to an agreement on the asset. We see the potential to increase annual production over a period of time to levels exceeding 2 million tonnes annually by restarting the integrated steel production and commissioning of the electric arc furnace. BH Steel is well located in a growing steel market, mainly driven by the construction industry. LNM intends to establish BH Steel as a preferred supplier for this segment but would also look to increase its share of value added products in the longer run.”
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