LNM Group, the world's second-biggest steelmaker, said it will buy a 69 percent stake in Poland's state- owned Polskie Huty Stali SA in an accord valued at $2 billion, including debt and investments
Published:
2 November 2003 y., Sunday
LNM will pay a total of 991 million zloty ($250 million) to cut some debt immediately and take on a further 3.4 billion zloty of debt to be repaid later. It also agreed to increase PHS's capital by 800 million zloty and invest 2.4 billion zloty by 2009. It bought the shares for less than 6 million zloty.
Netherlands-based LNM has expanded in central and eastern Europe by buying steel plants in Romania and the Czech Republic, making 8 million tons of steel a year in the region. PHS produces about 6 million tons annually. Poland is the largest of 10 countries set to join the European Union in May.
``The Polish economy is growing,'' LNM Chairman Lakshmi Mittal said in a telephone interview. ``When they become part of a larger Europe, it offers more opportunities for us in terms of our product mix and in terms of new markets.''
As part of the agreement, LNM will also provide PHS with a 300 million zloty bridging loan. In return, it will get more information on PHS's operations until the transaction is completed. PHS's four steel plants account for about 70 percent of Poland's steel market.
The Polish government started exclusive talks with LNM in July after rejecting an offer from U.S. Steel Corp., North America's largest steelmaker. The agreement with LNM is still subject to regulatory approval, LNM said, without elaborating.
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