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Croatia calls new tender for steelmaker as investor backs out

Croatia will invite new bids for its unprofitable steelmaker, Zeljezara Split d.d., after a Ukrainian investor the government chose for final talks backed out.

The government plans to call another tender for the 89.3% stake in Zeljezara, on sale for 1 kuna (18 US cents), by next week, Deputy Prime Minister Damir Polancec told reporters at a briefing today. The final bidder, Armko Smart Samobor, part of Ukraine's Smart Group, „said it was not able to meet the obligations it agreed to” Polancec said. Croatia, which started entry talks with the European Union in 2005 and aims to join this decade, has held on to minority stakes in most companies sold since becoming independent from Yugoslavia in 1991. It was urged by the IMF last year to speed up asset sales. The buyer of Zeljezara is required to keep the company's employees, provide a five-year business plan and take over 464 million kuna ($81.8 million) in debt. Croatia is also selling 20% of phone company Hrvatski Telekom d.d., 51% owned by Deutsche Telekom AG, over the Zagreb and one foreign bourse in the H1 this year. It may also offer 20% of electrical company Hrvatska Elektroprivreda on the exchange, Vecernji List newspaper reported yesterday. (Bloomberg)