Business, Politics, and Analysis

search
April 17, 2018 12:00 am | FILED UNDER: business

ArcelorMittal Pledges To Keep Government Informed Of Ostrava Steelworks Sale

By ČTK

Prague, April 17 (CTK) – ArcelorMittal will inform the Czech government of all steps related to the potential sale of the ArcelorMittal Ostrava (AMO) steelworks, Industry and Trade Minister Tomas Huner and AMO CEO Ashok Patil said at a briefing after their meeting today.

 

Huner also announced that a four-member working group with the participation of both parties would be created to analyse necessary data in case of the sale. The group might be established during the government’s working trip to the Moravia-Silesia Region next week, he said.

 

By selling the Ostrava-based AMO, international steel group ArcelorMittal wants to obtain an approval from the European Commission (EC) for its acquisition of the Ilva steelworks in Taranto, Italy.

 

The EC is to make a decision on the case by May 23 and is not commenting on it in the meantime.

 

Patil reiterated today that if the EC approved the sale, AMO would stay in full operation, though under a new owner.

 

The potential sale of the steelworks has been criticised by Josef Stredula, the head of the trade union umbrella organisation CMKOS.

 

“After the experience with (mining company) OKD and with what is currently happening at (engineering group) Vitkovice, we want to be ready. On the one hand, there is no reason to panic at this moment, since ArcelorMittal Ostrava is a thriving company with above-average wages, but on the other hand, we want to avoid a situation when we learn about key decisions too late. Maintaining employment Ostrava is an absolute priority for us,” Huner said.

 

Analysts do not expect AMO to have a problem to find a new owner with regards to its profits. The risk that the company employing nearly 7,000 people will be closed is minimal, they said.

 

According to Cyrrus analyst Lukas Kovanda, Chinese steel giant He Steel may show interest in AMO.

 

He Steel considered acquiring Slovak steelworks US Steel Kosice last year but the deal did not eventually take place.

 

Online daily E15 said on Sunday there are speculations that a company from Russia might buy AMO. It is also possible that Czech steelworks Trinecke zelezarny will try to revive its previous plans to create a Czech steel group.

 

Patil said today he could not comment on potential buyers until the EC made a decision on the matter.

 

Stredula told CTK that it would be bad news for ArcelorMittal Ostrava and its employees if the new owner was a mere speculator who buys companies for immediate profit only.

 

AMO posted a net profit of Kc1.308bn in 2016, Kc1.017bn higher than the year before, while its sales decreased by Kc1.8bn year-on-year to Kc28.8bn.

 

On Friday, ArcelorMittal announced that the plants intended to be sold as compensation for the acquisition of Ilva also include Romania’s Galati, Italy’s Piombino, Macedonia’s ArcelorMittal Skopje, Luxembourg’s ArcelorMittal Dudelange and operations in Liege, Belgium.

 

AMO, formerly Nova hut, has been part of ArcelorMittal since 2003.

 

The parent company ArcelorMittal is the biggest producer of steel in the world, accounting for about 6 percent of the global steel output.

%d bloggers like this: