Lakshmi Mittal acquires Romania's largest steel company
H S Rao in London
London-based non-resident Indian businessman Lakshmi N Mittal has signed an agreement for the acquisition of SIDEX, the largest steel company in Romania.
SIDEX has an annual steel-making capacity of five million tonnes per annum.
Under the agreement reached after four months of intense negotiations, LNM Holdings, a member of Mittal-owned LNM Group, will acquire the entire 90 percent stake of the Romanian government in SIDEX for a cash payment.
In addition, LNM Holdings has assumed certain agreed debt obligations and undertaken to invest US $351 million in the company's investment programme over the next 10 years.
The group has also guaranteed US $100 million in working capital and has agreed not to reduce the plant's 27,000-strong workforce over the next five years, other than by natural reasons and within the total employment cost budget of the company.
Stating that the acquisition of SIDEX is an important strategic step for the LNM Group, Mittal said during the signing ceremony, "Our overriding goal is to make SIDEX the operating benchmark for steel-making in central and eastern Europe, thereby ensuring the company builds a strong position in the highly competitive global steel industry."
Besides Mittal, present at the signing ceremony held at Bucharest on Wednesday were Prime Minister of Romania Adrian Nastase, Minister for Privatisation Ovidiu Musetescu and British Ambassador to Romania Richard Ralph.
Nastase said 150,000 citizens of Romania depended on SIDEX and 60 per cent of the population of the Galati city depended on the success of the deal.
Describing the LNM Group as the fourth largest steel producer in the world, Nastase said, "The contract we are signing today is, first and foremost, a partnership contract, with a reliable investor, from whom we expect further responsible participation in the productive economic actions of Romania."
With annual revenues of six billion dollars, the LNM Group has a total of 70,000 employees.