BL Premium reports that the government is pulling out all the stops to keep ArcelorMittal SA’s (Amsa’s) long steel business afloat. State-owned Industrial Development Corporation (IDC) has come to the rescue of the unit with a nearly R1.7bn cash injection.
Amsa said on Monday that the IDC cash injection would defer the closure of its long steel plants in Newcastle, Vereeniging and Mpumalanga, a move that would have led to 3,500 job losses. “The deferral of the wind-down has accordingly been enabled by a facility provided by the IDC in the amount of R1.68bn. The IDC facility is repayable by agreement between the parties and subject to, inter alia, the financial performance, solvency and liquidity of [the] longs business,” Amsa stated. It went on to indicate: “Amsa has also made certain undertakings regarding the continued operation of the longs business and retention of jobs for the deferral period. The IDC facility is part of a comprehensive package of intended initiatives aimed at positioning the longs business for future sustainability and profitability.” The government made its intentions to save Amsa’s long steel business clear last week when it said it would over the next year pick up the wage bill of the embattled unit. This was after the temporary employee/employer relief scheme (Ters) approved funding of nearly R417m to sustain 2,982 employees over the next 12 months. The bailout of Amsa’s long steel business coincides with a wide-ranging review of SA’s steel tariff structure, which is likely to lead to a hike in custom duties to protect the local industry
- Read the full original of the report in the above regard by Kabelo Khumalo at BusinessLive (subscriber access only)
- Read too, Amsa defers plant closure, suspends job cuts, thanks to R1.7bn government loan, at Fin24 (subscription or trial registration required)
- And also, IDC aid staves off ArcelorMittal SA steel-mill closure, at Moneyweb
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