KPMG Serbia and its associated law firm, Marjanovic Law, acted as lead transaction counsel to the Government of Republic of Serbia during the two-year privatization procedure of Zelezara Smederevo. The Asset Purchase Agreement was signed on April 18 and the transaction closed on June 30, 2016.
The KPMG Serbia team was led by Partner Boris Milosevic and KPMG’s legal team was led by Legal Head Mladjan Marjanovic. The Marjanovic Law firm agreed to provide some insight into the deal for CEE Legal Matters.
The privatization procedure started in the second half of 2014 and the KPMG and KPMG legal teams first represented the Government of the Republic of Serbia during its strategic partnership agreement negotiations with US steel producer Esmark Inc. – negotiations that began at the beginning of 2015 and ended on February 17, 2015 with the two sides failing to agree on the commercial terms of the potential strategic partnership. The subsequent step in the privatization effort supported by the KPMG teams was the negotiations between the Republic of Serbia and HPK Engineering B.V. which resulted in the latter being appointed to run the steel mill until publishing a new privatization. Finally, the team assisted the Serbian Government during its negotiations for the asset sale and purchase agreement with HeSteel China – one of the largest steel producers in the world – that successfully closed on June 30, 2016.
According to Marjanovic, the privatization of Zelezara Smederevo was performed as an asset deal. The purchase price achieved within the public tender procedure was EUR 46 million, with the buyer further promising to invest over EUR 300 million within the next five years.
Commenting on the deal, Marjanovic said: “This project was rather important and challenging for our team. We have provided the client with comprehensive legal services that are grounded in actual business practices and succeeded in solving the most complex and demanding legal problems during the transaction. We thank Bogdan Gecic and his team from Gecic Law for their excellent support regarding the state aid and competition law issues that arose during the transaction.”
In addition to Marjanovic, the KPMG legal team included Nevena Kovacevic and Andrea Klimovic.