Buyers eyeing Iran's Esfahan Steel Company

06/20/16

Source: Press TV

Esfahan Steel Company, Iran's third-largest maker of the metal, is reportedly seeking buyers amid plans to boost production. Bloomberg says in a report that companies from South Korea and Luxembourg are interested in taking a stake in the company. Iran and the Steel Pensioners' Fund for retired Iranian steel workers want to sell a 73 percent stake, added the report.

Esfahan Steel aims to boost production to 3.2 million metric tons from 2.4 million tons a year earlier. Output had declined 4 percent a year earlier as economic growth slowed because of low oil prices, reported Bloomberg.

Iran is the biggest steel producer in the Middle East after Turkey, according to World Steel Association data. Output rose to 1.5 million tons in April from 1.3 million tons at the end of last year before the international sanctions were lifted in January, the data show.

The Iranian Privatization Organization is overseeing the sale of the 56 percent stake in Esfahan that it took over from the Social Security Investment Company, the investment arm of the country's main social security provider. The Social Security group was reportedly unable to pay for the stake in full. The pension fund owns the other 17 percent that is being put up for sale.

As a first step, the entire 73 percent stake was offered through a block sale on the over-the-counter Fara Bourse on Sunday, and didn't generate any takers, Bloomberg added. The shares fell 5 percent in over-the-counter trading on Sunday.

A block sale will be offered again in the near future, said Bloomberg, quoting informed officials.