AMSA confirms discussions with ArcelorMittal, IDC
JSE-listed ArcelorMittal South Africa (AMSA) has confirmed that it is engaged in advanced discussions with Luxemburg-based steel giant and parent company the ArcelorMittal Group, as well as South African development finance organisation the Industrial Development Corporation (IDC) to find a sustainable solution based on a nonbinding term sheet regarding a potential transaction.
These discussions remain subject to definitive agreements, it states in a January 22 note to shareholders.
This follows a January 21 report by newswire Bloomberg, citing unnamed sources as saying that the parties have resumed talks over the potential acquisition of AMSA’s operations.
Late last year, talks between the parties fell apart without a deal after ArcelorMittal did not accept an informal proposal of about R8.5-billion, which would have included the repayment of R7-billion in debt to ArcelorMittal, the newswire reported.
The article explained that talks between ArcelorMittal, the IDC and South Africa’s Department of Trade, Industry and Competition started in November 2023 when AMSA announced plans to shut two steel mills that produce grades pivotal to the country’s automotive and mining industries.
Those discussions became exclusive last year when the IDC, which holds about 8% of AMSA, granted the steelmaker a loan to stave off the closure, it adds.
“AMSA has now closed the two steel mills and an iron-ore mine. It still operates a mill in Vanderbijlpark, south of Johannesburg, which produces steel sheets and other products and has idled facilities in the capital, Pretoria, and in the west coast town of Saldanha. The IDC sees its mills as crucial to the nation’s industrial sector,” the article reads.
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