ArcelorMittal Ostrava Sale To Close By 2019

Czech Industry and Trade Ministry

Ostrava, North Moravia, April 24 (CTK) – ArcelorMittal Ostrava (ANO) steel maker, which ArcelorMittal steel group wants to sell as a compensation for the purchase of Italian steelworks Ilva, should have a new owner as of January 1, 2019, union leader Vitezslav Prak told journalists today.


Prak issued the statement after the unions’ meeting with Prime Minister Andrej Babis and government members.


AMO CEO and board chairman Ashok Patil reacted to this information saying that no deadlines had been submitted to the company yet.


Industry and Trade Minister Tomas Huner told CTK that he heard about such deadline for the first time and that no concrete potential buyers interested in AMO were known yet.


“If the sale was to take place (by January 2019), individual owners of the steelworks should already be known today… Since some tender procedure should be held, six months is a deadline that cannot be met,” Huner said.


“We have asked experts in the sector about potential buyers and Mittal has mentioned two groupings that might be interested. But it was unconfirmed information, so the issue remains open,” Huner said.


ArcelorMittal has said this month that besides the companies in Ostrava, it also wants to sell plants in Romania’s Galati, Italy’s Piombino, Macedonia’s ArcelorMittal Skopje, Luxembourg’s ArcelorMittal Dudelange and operations in Liege, Belgium.


The situation has progressed a lot, Prak remarked.


“Reports from the European Works Council confirm this. We have been told there that a contract for the sale of these companies has to be prepared basically already in September and it should be signed in November. As of January 1 next year, these six plants already have to have a new owner,” he said.


The proposal for the sale of the companies is subject to approval of the European Commission which should decide on it by May 23.


In terms of output, Ilva is the biggest steel maker in Europe so ArcelorMittal would have to sell other plants in its purchase. The names of their potential buyers are not yet known.


The European Commission is first to decide whether it will accept the compensation package. The timetable should be known together with this decision if the sale is approved. In any case, the sale of the company would take many months, said Patil.


In case of AMO sale, production will continue without any limitations of capacity or job losses. According to the EC’s stance, it will approve the proposed compensation package only if it is convinced that in the hands of the new owner, the companies to be sold will continue production. All steps that will follow will be under the EC’s supervision, Patil added.


“If the EC approves the deal and supervises the situation, it is of course important for us that the new owner is a reliable investor which will develop the company and keep employment. AMO offers 70 jobs at the moment,” Babis said after the meeting.


The government will closely monitor the situation, he added. There is no reason to panic. “It is not true that the company plans lay-offs. Just the opposite, it is looking for new people,” Babis remarked.


At today’s conference, delegates of the trade union organisation Odborovy svaz KOVO ZAKLADNI ORGANIZACE Mittal Steel Ostrava – 3 Servis agreed that they want AMO’s new owner to pledge to maintain production and sales volumes and contract numbers at current levels for at least 10 years and that AMO be sold as one whole including its subsidiaries and sister companies, the organisation’s chairman Pavel Fichna has told CTK. The company has several trade union organisations.


The trade unionists said in their statement that AMO’s strategic partner should be picked based on long-term experience in steel industry and should be ready to accomplish its market, production and investment plans. The selection procedure should be transparent, with a technical advisor set by the government and trade union organisations’ representatives taking part in it. Unions also want to be present at talks with the new owner to negotiate employment guarantees, for example.


AMO together with subsidiaries has over 6,500 employees, it produces more than 2 million tonnes of steel annually, mainly for construction and engineering, exporting its products to over 40 countries.


In 2016, AMO made a Kc1.308bn net profit and its sales reached Kc28.786bn. The former Nova hut is a member of Lakshmi Mittal group since 2003.