Wrap Text
ACL - Proposed sale of an indirect 50% interest in Macsteel International Holdings BV and cautionary announcement
ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1989/002164/06)
Share Code: ACL
ISIN: ZAE000134961
(“ArcelorMittal South Africa”)
ANNOUNCEMENT REGARDING THE PROPOSED SALE OF AN INDIRECT 50% INTEREST IN
MACSTEEL INTERNATIONAL HOLDINGS BV (REGISTERED IN THE NETHERLANDS) ("MIHBV")
("PROPOSED TRANSACTION") AND CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are advised that ArcelorMittal South Africa has concluded a non binding Memorandum Of
Understanding ("MOU")with, amongst others, Macsteel Holdings Luxembourg SARL ("MacHold"), subject to an
agreement by the parties to use reasonable commercial endeavours to conclude and sign the final and binding
agreements based on the commercial principles and terms contained in the MOU. The MOU relates to the sale
of ArcelorMittal South Africa's indirect 50% interest in MIHBV to a subsidiary of MacHold.
MIHBV's issued share capital is presently held as follows:
- 50% by MSSA Investments BV, a wholly owned subsidiary of ArcelorMittal South Africa, registered in
The Netherlands ("MSSA"); and
- 50% by MacHold's subsidiary, MacSteel Global SARL BV ("MacGlobal"), registered in Luxembourg.
The Proposed Transaction will be implemented through a sale by ArcelorMittal South Africa of its 100% interest
in MSSA ("Sale Shares") to MacGlobal.
RATIONALE FOR THE PROPOSED TRANSACTION
MIHBV was set up as a joint venture between MacHold and ArcelorMittal South Africa and is headquartered in
Amsterdam, The Netherlands.
MIHBV is a holding company which engages in steel trading and shipping through its subsidiaries, Macsteel
International Trading Holdings BV (registered in The Netherlands) ("MITHBV") and MUR Group BV and their
subsidiaries (registered in The Netherlands).
The MIHBV Group trades steel around the world. In the early years of its existence, most of the steel was
sourced from ArcelorMittal South Africa. Today, whilst it remains an important source of steel products,
ArcelorMittal South Africa now supplies less than 20% of the total steel tonnages traded by MIHBV, and less
than 2% of volumes shipped by MIHBV. Consequently, the investment is no longer considered to be a core
asset for ArcelorMittal South Africa, and hence the decision has been made to dispose of the Sale Shares.
STRUCTURE OF THE PROPOSED TRANSACTION
In giving effect to the Proposed Transaction, it is envisaged that ArcelorMittal South Africa will dispose of the
Sale Shares to MacGlobal in terms of a sale of shares agreement ("SPA").
It is anticipated that the effective date of the Proposed Transaction will be the date upon which the below
mentioned conditions precedent have been fulfilled or waived (as the case may be) ("Effective Date"). It is further
1
anticipated that, subject to regulatory approvals, the SPA and Marketing Agreement (as defined below) will be
executed by 1 July 2018 but will only be implemented from the Effective Date.
KEY COMMERCIAL TERMS
Purchase Price:
The purchase price for the Sale Shares is agreed to be an amount of USD220 million, to be discharged on the
Effective Date upon delivery of the Sale Shares by ArcelorMittal South Africa to MacGlobal.
Conditions Precedent:
The Proposed Transaction will be subject to the fulfilment or waiver (where appropriate) of, inter alia, the
following conditions precedent:
a. the execution of a four(4) year marketing agreement between ArcelorMittal South Africa and
MITHBV, and such agreement becoming unconditional in accordance with its terms ("Marketing
Agreement");
b. the execution of the SPA between ArcelorMittal South Africa and MacGlobal and such agreement
becoming unconditional in accordance with its terms, which includes the provision of standard
warranties and the conclusion of a due diligence assessment of MSSA;
c. to the extent required, obtaining the necessary governance approvals, including approval of
ArcelorMittal South Africa's shareholders by ordinary resolution as a category 1 transaction in terms of
the JSE Limited (“JSE”) Listings Requirements; and
d. obtaining the necessary regulatory approvals (including competition/anti-trust approvals) required for
implementation of the Proposed Transaction.
Lender approvals in terms of the R4,5b Revolving Borrowing Base Finance Facility Agreement (Facility
Agreement) dated 25 May 2017 has been obtained.
Shareholder support
As a precondition to the Proposed Transaction, ArcelorMittal South Africa will obtain an irrevocable undertaking
from ArcelorMittal AG, its majority shareholder, to the effect that ArcelorMittal AG will vote in favour of the
resolutions of ArcelorMittal South Africa's shareholders required to give effect to the Proposed Transaction.
USE OF THE SALE PROCEEDS
The proceeds of the sale will be used primarily to strengthen the balance sheet of ArcelorMittal South Africa, to
fund the working capital requirements and/or to fund other investments in the operating business.
FINANCIAL IMPLICATIONS AND PRO FORMA FINANCIAL EFFECTS
The required Pro Forma Financial Effects of the Proposed Transaction are being reviewed by the auditors and
will be communicated in a later announcement and in the Category 1 circular to be issued to shareholders.
CAUTIONARY ANNOUNCEMENT
In the circumstances, the negotiations in respect of the Proposed Transaction are ongoing, the full impact of
which is being determined, and if successfully concluded, may have a material effect on the price of ArcelorMittal
South Africa’s securities.
Accordingly, shareholders are advised to exercise caution when dealing in ArcelorMittal South Africa’s securities
until a further announcement is made in this regard.
CIRCULAR
The transaction is a Category 1 transaction in terms of JSE Listings Requirements and therefore shareholder
approval is required for the Proposed Transaction. Accordingly, a circular containing full details of the Proposed
Transaction, including the notice of the shareholders’ meeting will be sent to ArcelorMittal South Africa
shareholders in due course.
2
28 May 2018
Vanderbijlpark Works
For further information please contact:
Mr Hennie Vermeulen
Group Manager: Corporate Communications
Tel: (016) 889 235214
Sponsor to ArcelorMittal South Africa Limited
Absa Bank Limited (acting through its Corporate and Investment Banking division)
3
Date: 28/05/2018 04:27:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
