ArcelorMittal Sells Majority Stake In Algerian Unit To State

(RTTNews) - ArcelorMittal (MT) and Algerian state-owned company Sider have finalized a strategic agreement, whereby the steel giant would reduce its shareholding in ArcelorMittal Annaba and ArcelorMittal Tebessa to 49 percent, with the state of Algeria holding the remaining share of 51 percent.

Currently Arcelor owns 70 percent and Sider owns the remaining 30 percent. The value of the stake sale wa snot disclosed.

The agreement includes an investment plan of $763 million for the steel complex at Annaba and the mines in Ouenza and Boukhadra. It also includes a project to more than double the plant's production capacity from 1 million to 2.2 million tons per year by 2017.

The investment plan will be funded by equity contributions from shareholders and bank financing. The shareholders' agreement between the parties involved is to be signed in the next few days.

According to ArcelorMittal, this plan will ensure a long term future for steelmaking in Annaba and mining in Tebessa, where the production unit will be modernized through the relining of the blast furnace, modernization of the sinter plant, the steel plant and the rolling mills.

A new electric steel plant will be built and the downstream units will be reinforced with the construction of a new rolling mill for rebar and wire rod with a capacity of 1 million tons of production.

ArcelorMittal believes that the investment will allow the Annaba unit to better respond to increasing domestic demand for steel products in Algeria and to contribute positively to the government's drive to promote self-sufficiency in steel.

The agreement includes a human resources development plan as well. Employees will be given training to adapt to the new technologies. The plan is backed by a social stability pact that has been agreed with the unions.

Michel Wurth, member of ArcelorMittal's Management Board Group, said, "We are pleased to have reached this agreement with Sider, with whom we have always enjoyed a strong relationship. The agreement will enable ArcelorMittal Annaba and ArcelorMittal Tebessa to play a long term role in Algeria's steel and mining industries."

MT closed down 1.6 percent on Friday at $13.82.