Steel producer ArcelorMittal South Africa (AMSA) confirmed ongoing engagements with the ArcelorMittal Group and Industrial Development Corporation (IDC) aimed at finding a long-term and sustainable solution and based on a non-binding term sheet for a potential transaction.
AMSA emphasised that discussions are not final, insisting that any deal would still need formal agreements to be signed and would require several approvals.
“There is no certainty that any transaction will be concluded. Further announcements will be made in relation to these matters as and when appropriate.
“Accordingly, shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made,” reads the statement.
AMSA has been faced with a crisis involving the closure of its Newcastle and Vereeniging plants, resulting in thousands of job losses and about 20 000 more jobs over time.
Plant closures impact communities.
Sunday World previously reported that the Steel and Engineering Industries Federation of South Africa (Seifsa) stated that closing the two, together with the ArcelorMittal Rail and Structural, will negatively impact local communities, contractors, and suppliers, among others.
Seifsa president Elias Monage said the decision taken by AMSA will now have fewer players producing long-steel products such as fencing material, reinforcing bars, beams, rails and profiles that are used in the construction, mining, and manufacturing sectors.
“The effect of this latest development will reverberate throughout the economy and the continent, impacting the auto, motor, construction, and mining sub-sectors of the economy and all who work in it. This development presents a major setback to the base of the industrial sector.”
The company’s demise was attributed to rising electricity prices and erratic transportation, both of which raise operating expenses.
