The buyer company did not fulfill its obligations
The government of Montenegro has given permission to the state electricity distribution company Elektroprivreda Crne Gore (EPCG) to start negotiations with the Turkish steel producer Tosyali Holding on the acquisition of the Zeljezara Niksic Steel steel plant – the subsidiary of Toscelik Special Steel. SteelOrbis reports about it.
The plant has shut down or reduced the production at some units last March due to a market recession as a result of the pandemic. Subsequently, and then the plant’s divestment process has begun,
Earlier this year, Neksan of Montenegro offered Toscelik €15.1m for the plant, but this offer was not accepted as Toscelik requested €20m for the sale.
The Zeljezara Niksic Steel plant was purchased by Tosyali Holding in 2012 for €15 million, committing to invest €35 million over three years and employ up to 550 workers. However, the company could not fulfill its obligations.
As GMK Center reported earlier, a number of European steel companies have decided to reduce production due to weak demand for steel. Car manufacturers have consumed less steel because of lower production rates caused by a shortage of components. Other end-users, including the white goods segment, were also reported to show lower demand for steel.