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EghtesadOnline: For the third time, Iran Privatization Organization is going to offer a 16.75% equity stake of Esfahan Steel Company on the over-the-counter Iran Fara Bourse on July 1.

The block sale is made up of 5.55 billion shares with a base price of 850 rials ($0.22) for each share, marking a significant 1,899-rial drop in price compared to the last sale bid.

This is the fifth time ESCO’s shares are being put up for sale by IPO. According to Bourse Press, the first was in February 2016 with a 35% stake, followed by a 73% offering in June, a 16.75% offering in November and another 16.75% the following month.

The shares have declined in price every time but failed to attract any buyers, as the company is still struggling to clear its outstanding debts, according to Financial Tribune.

IPO’s insistence on selling the stake is due to the fact that at least 16.75% 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 Social Security Investment Company, IPO and other holders.

The Isfahan-based producer is Iran’s oldest steelmaker and one of the country’s largest producers of structural steel. It was jointly established in 1965 by Iran and the Soviet Union’s Tyazhpromexport Company. Its steel production facilities became operational in 1972.

ESCO was reportedly seeking to reach a setoff agreement with the government back in May to lighten its debt burden of 6.6 trillion rials ($175 million) accumulated as of November, a significant portion of which pertains to steelmaker’s debts to banks.

The agreement entailed setting off state-run Social Security Organization’s 7.6-trillion-rial ($200 million) debt to ESCO. Its finalization still awaits the Cabinet’s approval.

According to Financial Tribune’s sister publication Donya-e-Eqtesad, ESCO is currently suffering losses worth $26.31 million every day. The gravity of the situation has prompted experts to forecast the veteran steelmaker’s bankruptcy.

However, according to ESCO’s Managing Director Ahmad Sadeqi, ESCO is bound to get back on its feet by taking new initiatives such as exporting 100% of the company’s production, manufacturing high value-added goods such as rail tracks and cutting down on production costs.

Iran Steel Iran Privatization Iran Fara Bourse Esfahan Steel Company