Croatia Rejects Sale of Steel Mill Zeljezara Split to London-based Carlson Private Equity

Carlson Private Equity said last month it bought 223,060 shares of Zeljezara Split for 1,200 kuna ($244/165 euro) per share from the steel mill’s majority owner, Polish privately-held steel manufacturer and distributor Zlomrex.

“The negotiating team of the ministry rejected the offer made by Carlson, which means a procedure for cancellation of the contract has been launched,” the ministry said in a statement on Wednesday.

Zlomrex bought 89.34% of the indebted Croatian steelworks for 10.1 million kuna from the government in Zagreb in 2007 and increased its stake later. The Croatian government still has the right to endorse all important issues related to the steel mill.

The ministry also said it will continue talks with Zlomrex, aiming to find a new strategic partner of Zeljezara Split and resume production in the plant.

Zeljezara Split shares were last traded on November 20, 2008 on the ZSE, when they closed unchanged at 250 kuna.

(1 euro = 7.258 Croatian kuna)