Slovakia's prime minister said today he is close to finalizing a deal that will maintain U.S. Steel's ownership of one of the Eastern European country's largest employers.
The Pittsburgh steel producer disclosed in November it was considering offers for its mill in Kosice in eastern Slovakia. The company acquired the formerly government-owned steelmaker in 2003 for $475 million. The plant can produce 5 million tons of sheet steel annually for the automotive industry and other customers.
The talks occurred today at U.S. Steel's Grant Street headquarters.
They took place as U.S. Steel faces an investment of $400 million over the next several years to bring the plant into compliance with environmental regulations. Europe's continuing economic woes, which prompted U.S. Steel to sell its troubled Serbian plant to the government for $1 in January 2012, also remain an issue.
"We are on the right track," Prime Minister Robert Fico said in a statement released by his government.
Mr. Fico said that if negotiators manage to finalize details, "We will be able to bring -- this week or maybe even tomorrow -- a piece of good news."
U.S. Steel spokeswoman Courtney Boone confirmed the talks took place, but declined further comment.
A U.S. Steel spokesman said in November that the Kosice plant and its affiliates employed 13,000. It operated at 78 percent of capacity last year and reported an operating profit of $34 million vs. an operating loss of $162 million the previous year.
In a securities filing last month, U.S. Steel disclosed it expects to have to invest $400 million at Kosice to comply with European Union environmental standards that must be met by March 2016. It said it is studying whether it could get grants from the EU to cover a portion of those costs.
The steelmaker said it expects to incur additional costs related to changes in the EU's system for trading emissions credit allowances. The filing also indicates that Slovakia increased its corporate tax rate from 19 percent to 23 percent in January.mobilehome - breaking - businessnews
Len Boselovic: email@example.com or 412-263-1941.