BELGRADE – An international bank syndicate wants the Serbian government to nullify the $21.3 million sale of steelworks Sartid to US Steel and to organize a new public tender, members of the syndicate said yesterday. Representatives of the creditor group, including Bank Austria, part of Germany’s HVB Group, Germany’s WestLB and France’s BNP Paribas, told a news conference they wanted to shed more light on the deal. They said a response would be crucial for the future of private investments in Serbia. «The outcome will have impact on commercial creditors and raw material suppliers,» said Carla Jakoby, director of WestLB Debt Restructuring Solutions. Banks said the value of Sartid’s assets was in the hundreds of millions of dollars. They also objected that US Steel assumed none of Sartid’s $1.7 billion debt and other obligations in the April 2003 sale. «The banks are now demanding, in Serbia’s interest, a renewed and transparent public tender procedure… Failing this, the banking syndicate will find itself compelled to take further legal steps,» said Angelo Rizzuti, general manager of Bank Austria’s Trade Finance division. He added that the banks were considering filing a suit at an arbitration tribunal in Vienna. Serbia’s Privatization Minister Aleksandar Vlahovic was not immediately available for comment. The government has said it had every right to negotiate Sartid’s sale without calling a tender. Competitor denied access «Calling a tender is a rule and negotiation an exception under Serbia’s Bankruptcy Law,» a lawyer for the banks told Reuters. The syndicate, also including Belgium’s KBC and South Africa’s Standard Bank, has some $100 million in claims against Sartid from a revolving facility to finance imports of raw materials, approved in 1997 during the rule of Slobodan Milosevic. LNM Holdings, the world’s second largest steel producer, which is keen to take part in a tender, said the government had misled the company to believe there would be a tender but then denied it access to Sartid’s books. «We have never been able to perform due diligence… But the US Steel offer is a fraction of what we would have offered,» said Sudhir Maheshwari, LNM chief financial officer. He added that LNM would have assumed some of the debt and come to terms with Sartid’s creditors. Massive debts In August 2002, Serbia declared state-held Sartid bankrupt due to massive debts. The government then transferred the authority for the company’s liabilities to Belgrade’s Commercial Court. Rizzuti said the court has never recognized the banking syndicate’s claim, even though Sartid’s 2000 annual report, signed by Deloitte & Touche, had a reference to the revolving facility. A non-bank member of the syndicate – Swiss trader Duferco SA – has a separate $64 million claim approved by the court. Before the bankruptcy, Sartid signed a one-year contract to process steel products for US Steel’s Slovak unit, which also gave the US firm priority access to any restructuring of Sartid.