The offer to sell a 17% equity stake in Iran’s Esfahan Steel Company attracted no bids by the Nov. 16 deadline, the Iranian Privatization Organization said in a statement.
It is the second time the IPO tried to sell a stake in ESCO, but despite cutting the minimum price by 37%, it was again unsuccessful, S&P Global Platts reported.
IPO advisor, Seyyed Jafar Sobhani, said a new date would now be set for the sale.
At least 17% of ESCO’s shares owned by the national steel industry pension fund must be sold to clear the fund’s debts to the government.
The rest of the company’s shares are owned by two other funds and other holders.
Sources said there are no signs of serious interest from any domestic or foreign company to buy a stake in ESCO, which is not profitable now but has a reasonable amount of assets.
ESCO is the only integrated steel producer in Iran using blast furnaces.
Founded in 1971 using Russian technology, it was renovated by Italian and Japanese companies and also a new blast furnace was built by POSCO to increase hot metal capacity to 3.6 million tons/year from around 2 million tons/year.
One of the company’s blast furnaces is idle because of low demand in the domestic market. It made a loss of 3.6 trillion rials (about $98 million) in the first six months of the current Iranian year that started in March, according to the company’s filing to Tehran Stock Exchange. The loss is, however, 10% less than in the same period of the previous year.
ESCO recently started production at a 400,000 tons/year rail plant and signed a deal with the Islamic Republic of Iran Railways to supply 40,000 tons of U33 rail.
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