South African steel making company buys assets of two bankrupt Mozambican firms

9 October 2006

Maputo, Mozambique, 09 Oct – Mittal Steel South Africa Friday in Maputo signed a contract to buy two bankrupt Mozambican companies: Companhia Siderúrgica de Moçambique (CSM) and Companhia Moçambicana de Trefilarias (Trefil).

The two companies were controlled by Portuguese businessman António Simões.

His holding company, Empresa Metalúrgica de Moçambique, acquired a 60 percent stake in the two companies when they were privatized some 15 years ago, but never went ahead with projected investments.

Due to the lack of investment, CSM had not been operation for the last five years and Trefil had not been functioning for over a year.

Mittal negotiated Friday’s agreement with state shareholdings management company, Igepe, as the Mozambican state still owns 40 percent of each of the companies.

Mittal agreed to pay US$11.4 million for the assets of CSM and Trefil, or less than half of what the two companies owe the Mozambican treasury.

Enrico Reatto, of Mittal, said that his company would make an immediate investment of US$10 million in order to get the factories running again, with production expected to be underway within six months.

The South African company plans for CSM to begin producing iron for the construction industry and for Trefil to manufacture wire, barbed wire and nails.

Mittal Steel South Africa is part of the Arecelor-Mittal conglomerate, the world’s largest steel producer. (macauhub)