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ArcelorMittal South Africa giving 17% stake to black-owned partner

ArcelorMittal South Africa Ltd. made a deal, worth about 2.2 billion South African rand, to give a 17% stake in the company to its partner Likamva Resources Pty. Ltd., a specially formed, black-owned company, according to a Sept. 28 news release.

The deal is part of the steelmaker's efforts to comply with governmental objectives of increasing the participation of black people in the economy.

The deal calls for Likamva to introduce broad-based social and community development organizations within two years. These establishments will be given an indirect 5% interest in the company.

In addition, the South Africa-based unit of ArcelorMittal will give another 5.1% of its shares to employees and management through a trust fund to be established under the name of ArcelorMittal South Africa (AMSA) Employee Empowerment Share Trust.

The lock-in period for the empowerment partner and the employee trust is 10 years.

South Africa and ArcelorMittal's local subsidiary agreed in August on a new transparent steel pricing scheme after the country's Competition Commission imposed a 1.5 billion rand fine on the company for conspiring to rig steel prices.