ArcelorMittal’s Algerian subsidiary faces bankruptcy, seeks Government's help
The Algerian subsidiary of ArcelorMittal, the iron and steel multinational company, faces bankruptcy at its plant in El- Hadjar in the east of the country, a local Trade union official said in a statement to the press.
- “The declaration of bankruptcy is imminent. The complex is crushed under a debt of $120 million (78 million euros),” the secretary-general of the union at the El Hadjar enterprise, Smain Kouadria said.
- “Shareholders are cooperating actively with the Algerian government to evaluate the situation and settle the problem as soon as possible.
- For the moment, we are working to find an early solution,” the director general of ArcelorMittal, Vincent Le Goic, said on national radio.
- According to Kouadria, the steel plant located near Annaba does not have enough cash “to continue functioning normally”.
- ArcelorMittal holds 70 percent in the complex and the public Algerian group Sider holds the remaining 30 percent.
- The plant unsuccessfully sought a $200 million loan from the External Bank of Algeria (BEA) for renovation work and repaying a loan of $120 million after the state-owned bank sought collateral.
- Industry Minister Mr Mohamed Benmeradi said the BEA had alreadly provided a first loan portion worth $67 million but was seeking additional collateral to release further funds.
- The plant “can appeal to its parent company to provide more guarantees, in order to reach an agreement with the BEA” on the second slice of the loan, said Mr Benmeradi.
- Last September, the Algerian government gave the green light for the renewal of the partnership contract with ArcelorMittal.
- This decision should make it possible to undertake an investment programme worth 500 million euros ($642 million) between 2011 and 2015.
- This programme would help pay for new plant to bring the capacity of the El- Hadjar complex up to 2.4 million tonnes per year from two million tonnes currently.