OREANDA-NEWS. April 25, 2007. Russia’s mining and metals giant Mechel has lost a tender to buy a controlling stake in the Croatian Zeljezara Split metal producer with the lowest bid. Industry experts, however, doubt that the Russian company would win even with a higher bid as Croatia had negative experience of selling another factory to Mechel.
Poland’s Zlomrex, which bade about $1.9 million for 89.34 percent in Zeljezara Split, and announced plans to invest $36 million in the factory has been announced the winner, Croatian officials said Wednesday. Mechel offered $13.8 million, the lowest bid at the tender.

Zeljezara Split, the sole producer of reinforcement steel in Croatia, outputs 180,000 rebars annually. However, the factory works at 36 percent of its capacity now.

Croatian officials note the Mechel’s bid had an edge over its rivals as the Russian company was willing to assume the plant’s $18.5 million liabilities to authorities. The Polish bidders, however, offered to assume the plant’s debt to private banks worth $30 million. The Croatian government is to officially endorse the results of the tender on Thursday.

Russian analysts note that Mechel would have low chances to win the tender even if it had bidden more. The company bought another Croatian metal producer, Zeljezara Sisak in 2003, but had to give it up one year later due to enormous liabilities