"MECHEL" TAKES OVER SISAK IRONWORKS

SISAK, March 17 (Hina) - An agreement on the sale of Sisak Ironworks to Russia's Mechel company took effect on Monday. Mechel has taken over the ironworks and its 1,700 employees with all the commitments, rights and risks. #L# The bankruptcy administrator has fulfilled all obligations from a sales contract signed on February 6, and paid the salaries to workers for January and February. The administrator will also pay salaries for the first 16 days of March as soon as profit is yielded from selling spare parts and raw materials to the new owner. At a session the Croatian government last week adopted the contract on the sale of the ironworks to Mechel, removed the mortgage from the plant's real-estate and freed the Russian company from paying capital transfer tax, specifically, a five percent tax will be calculated on the purchase price of one kuna. This followed Mechel's provision of a recoverable bank guarantee for six-month worth of salaries in case the Russian partner abandons the venture. "Mechel Ironworks" has called to work some 200 employees of the steel and rolling mill plants and around 90 workers of the Caprag Overhaul, who will work on preparing production. The new owner will call some 550 workers by the end of the month, and all of the 1,700 workers by the start of June. Workers on stand-by will receive 80% of their salaries. (hina) lml