African Industries interested in taking over the former Mechel factories in Romania

Indian group African Industries is interested in taking over the five factories previously owned by Mechel in Romania, according to Romanian daily Ziarul Financiar. Tommaso Serrano, who represents African Industries in Romania, confirmed the ongoing talks with the owner of the factories, Invest Nikarom, and has made an offer for the entire package. It includes factories in Târgovişte, Ductil Steel Buzău, Câmpia Turzii, Oţelu Roşu and Laminorul Brăila. The offer also includes taking over the debt of these factories. In Romania, African Industries is active via African Steel Mills, which in 2010 started building a steel plant in Oltenita, with a EUR 150 million investment. The production unit was to be built on the premises of the former thermal power plant in Oltenita and on some of the premises of the former melting house Turol SA, where some existing buildings had to be demolished. Mechel sold its factories in Romania to a company called Invest Nikarom earlier in February this year for a symbolic amount of USD 70, only to stop bleeding money. The sale prices came as a surprise, as earlier in 2012, Mechel announced plans to sell all its Romanian companies for some USD 150 million, according to Romanian media. This was part of a wider series of sales in its Eastern European Steel Division. The company said production will continue, but some layoffs were in sight. Mechel had entered the market in 2002, with the purchase of the Targoviste factory, and it expanded throughout the country. African Industries had previously tried to take over the Mechel factories in Romania, which last year had sales of some EUR 480 million. Late 2012, local media was announcing that representatives of African Industries Group, the mother company of Transdanube Industries, went to Câmpia Turzii to talk to Mechel representatives about taking over the steel maker. African Industries Group has been operating in Nigeria for over 40 years. It runs seven steel, chemical, glass and power plants, and has affiliate offices in Eastern Europe, UAE and Asia. African Industries operates four steel complexes in Nigeria with a melting capacity of 435,000 metric tonnes, a rolling capacity of 735,000 metric tonnes and a steel service center that produces sections and tubes. editor@romania-insider.com