Steel producer ArcelorMittal South Africa’s (AMSA’s) shareholders on Thursday approved the sale of AMSA’s 50% indirect interest in Netherlands-based Macsteel International Holdings (MIH) to a subsidiary of Macsteel Holdings Luxembourg for $220-million, or R2.8-billion.
AMSA advised that the transaction would be completed by December 31, once competition authorities have given their approval and once the MIH resolution regarding a declared dividend has been cancelled.
Engineering News Online previously reported that AMSA had been hinting to a sale of MIH for several months, owing to balance-sheet pressures at the JSE-listed company, which had failed to deliver a profit since 2010.
Last year, the JSE-listed steelmaker declared a headline loss of R2.52-billion for the year to December 31, 2017, having reported a loss of R2.59-billion in 2016.
During 2017, AMSA’s net borrowings also surged to R3.2-billion from R290-million in the previous year.
AMSA CEO Kobus Verster said the proceeds of the sale would “significantly strengthen” the group’s balance sheet and would be used to fund working capital requirements and investments in the operating businesses.