BELGRADE, April 5 (Reuters) - The Serbian government wants to invite bids for a stake in its sole steel mill to reduce strain on the budget less than a month before elections, the outgoing president said on Thursday.
Serbia, which is struggling to attract investors to boost growth and combat 26.7 percent unemployment, bought back the underperforming steel plant in the central city of Smederevo from U.S. Steel last December.
The government, which took over the plant for a nominal $1 and has since financed its 5,500-strong workforce from the budget, has repeatedly said it wants a strategic partner.
"The government will invite bids for a strategic partnership next week ... and I am an optimistic this will be a profitable deal," Boris Tadic, Serbia's outgoing president told reporters.
Tadic resigned on Thursday, 10 months before the end of his term, paving the way for parliamentary and presidential elections on May 6.
The sale of the Smederevo plant would serve as a campaign boost for Tadic and his Democrats who are competing with the Serbian Progressive Party (SNS), whose conservative, populist policy is playing to voter anger over the state of the economy and rampant corruption.
Earlier this month the Smederevo plant restarted production in one of its two blast furnaces after idling it in February due to a shortage of raw materials caused by a cold snap in Europe.
The plant idled its other iron-making blast furnace in late 2011 to reduce costs, before U.S. Steel cut its losses and pulled out from the European Union applicant country.
U.S. Steel bought the then-bankrupt Sartid steel mill in 2003 for $33 million, but the plant has been running well below annual capacity of 2.4 million tonnes for the past five years.
Earlier this year, Serbian media reported that the Luxembourg-based United Group SA, comprised of Czech Pilsen Steel and Russia's BumMash, as well as Ukraine's steel magnate Rinat Akhmetov were considering investing in the Smederevo mill.