Esfahan Steel Co., Iran’s third-largest maker of the metal, is seeking buyers amid plans to boost production as the nation rebuilds after years of international sanctions that hurt its economy.

Companies in South Korea and Luxembourg are interested in taking a stake, Masoud Gholampour, research and and marketing manager at Novin Investment Bank, said in an interview in Tehran. Novin is advising the government in the sale. Iran and the Steel Pensioners’ Fund for retired Iranian steel workers want to sell a 73 percent stake.

Esfahan Steel aims to boost production to 3.2 million metric tons in the year ended March 2017 from 2.4 million tons a year earlier, according to Mojtaba Fereydoni, an investment manager at Esfahan Steel in Esfahan in central Iran. Output had declined 4 percent a year earlier as economic growth slowed because of low oil prices, he said.

Trailing Turkey
Iran is the biggest steel producer in the Middle East after Turkey, according to World Steel Association data. Output rose to 1.5 million tons in April from 1.3 million tons at the end of last year before the international sanctions were lifted in January, the data show. The nation is seeking to rebuild its energy and other industries.

The Iranian Privatization Organization is overseeing the sale of the 56 percent stake in Esfahan that it took over from the Social Security Investment Co., the investment arm of the country’s main social security provider. The Social Security group was unable to pay for the stake in full, according to Gholampour. The pension fund owns the other 17 percent that is being put up for sale.

As a first step, the entire 73 percent stake was offered through a block sale on the over-the-counter Fara Bourse on Sunday, and didn’t generate any takers, according to Gholampour and Jafar Sobhani, adviser to the head of the Iranian Privatization Organization. The shares fell 5 percent in over-the-counter trading on Sunday.

A block sale will be offered again “in the near future,” Sobhani said.

By Bloomberg