Swiss 8B sole bidder for Montenegro's EPCG Zeljezara lease - report

The details of the offer will be announced at the official bid opening ceremony on Wednesday, state broadcaster RTCG reported on Monday, citing unofficial sources.

EPCG launched the new tender for the lease of the steelmaking and forging capacities of its unit EPCG Zeljezara Niksic in late March, setting an April 15 bidding deadline.

In the previous tender attempt, EPCG rejected the preliminary proposals of a consortium made up of local company Neksan, China’s Universal Energy and Czech Energy & Industrial Management Advisory Services, and a Swedish tie-up comprising Kvalitetsbygg Gruppen and Uber Nordic, inviting 8B Capital only for further negotiations.

Later on, however, EPCG pronounced the first tender for EPCG Zeljezara's lease unsuccessful in early March after 8B Capital failed to provide bank guarantees.

In the first tender, 8B Capital had offered to restart production at EPCG Zeljezara producing 2,500 tonnes of forged steel at the start and raising the production to 60,000 tonnes in five years, RTCG reported. The investor had also pledged to hire 25 workers at the start and raise their number to 150 within six months.

In the second tender, EPCG offers EPCG Zeljezara's manufacturing facilities, including the melt shop and forge shop, under a lease for a period of at least 5 years and up to 10 years. To participate in the tender, interested investors have to submit a 5-year business plan worth at least 25 million euro ($26.6 million) and to propose a monthly rent of between 30,000 euro and 150,000 euro.

They should initiate production within at least 6 but no more than 12 months after a lease agreement is signed, and hire a minimum of 100 and a maximum of 150 people in the first 12 months, EPCG has said in the tender invitation, noting that the advantage will be given to those companies that base their production agenda on the so-called "green steel" production.

EPCG acquired Zeljezara Niksic from Turkey's Toscelik for 20 million euro in December 2022.

Located in the western city of Niksic, EPCG Zeljezara has two 60-tonne electric arc furnaces that can produce an estimated 300,000 metric tonnes of crude steel per year.

($ = 0.938 euro)