ArcelorMittal offers to sell company to Government for $1

Date: 
Sunday, March 13, 2016 - 00:00

The Steel Workers Union (SWUTT) is not accepting ArcelorMittal’s claims that it was incurring losses since 2009, which subsequently led to the company being forced to close its Point Lisas plant on Friday.

The union has labelled the company’s move as a “strategic” way to wash its hands of its obligations to workers.

Only on Thursday, workers celebrated having won at the Industrial Court, in a case against the company for laying them off twice between December 2015 and February this year.

Their short-lived jubilation turned to immediate sorrow, after they were informed that the company had incurred a $1.3 billion debt and could no longer continue to operate. Over 700 workers had suddenly lost their jobs.

According to SWUTT’s vice-president, Ramkumar Narinesingh, the company’s managing director, Robert Bellisle, indicated in a meeting on Friday that last December, the company had sent a proposal to the Government offering the plant for sale for $1. 

“He did not say whether it was a TT or US dollar. It could have been a single dollar or a nominal fee, he did not elaborate." This means that if Government purchases the company, it will automatically inherit the $1.3 billion debt. 

Narinesingh said when the liquidators take over, the company will no longer be obligated to settle outstanding payments to people who would have won in court. Additionally, matters before the courts will be deemed null and void.

He said what this country was facing was the actions of a shrewd businessman and his executives.

Steel tycoon Lakshmi Mittal was once listed by Forbes as the third richest man in Britain, with a net worth of over $45 billion.

According to Narinesingh, the union believes that ArcelorMittal’s main creditor is Mittal himself. Mittal, he added, mines iron ore and sells back to ArcelorMittal. Government, he noted, has called on the company to provide a list of their creditors, which they are not obligated to do.

The union is now calling on Government to step in, “and not diplomatically,” to protect the rights of its citizens.

“Where were their austerity plans? We just cannot see that a company with knowledge that it was heading into a bleak financial situation would continue wanton expenditure as it did in the years since 2009. This man (Mittal) bought this company for $70 million and in one year paid back that loan. He was recorded as one of the richest men in England and just allowed the largest steel producing company in the world to suffer cash haemorrhages, while executives here replaced their upgraded vehicles annually.

“They kept lavish Christmas parties for several years now, after 2009, rented out entire venues and engaged top entertainment and the company was in debt? We, the union, as the social partners, were never told that. In fact we had the largest union settlement of 14 per cent and hefty upgraded benefits in our last negotiations and all the while the company was incurring huge debts?” queried Narinesingh during a telephone interview with Sunday Guardian yesterday.

He said there were just too many ways to have curbed expenditure if the company knew it was that strapped for cash and anticipating closure.

Additionally, there was the issue of final settlement of share payments from after the period 2008, which was made mandatory during Mittal’s buy-out years ago. He said workers had already been paid $150,000 each for the period up to 2008 after Mittal continued to refuse to place the shares on the local open market, but agreed to pay the cash.

The previous government, he stated, is aware of discussions to finally settle these payments.

Narinesingh said they anticipate that Mittal (Lakhsmi) will allow the company to be liquidated and “wash his hands of all obligations the company has to its local workers.”

He also speculated that Mittal would return in the near future, repurchase the company and return to these shores under a different company name, continuing operations in some form or fashion.

Narinesingh queried, too, the valuation of the company after an audit by Pricewaterhouse.

He said what they understood occurred was that the company was devalued by its executives who stated that its assets would have to be replaced rather than repaired.

Calls to the mobile of Labour Minister Jennifer Baptiste-Primus yesterday went unanswered.

Calls to the mobile of the head of legal at ArcelorMittal Vijayalakshmi Jaigopal also went unanswered.

Finance Minister Colm Imbert, when reached on his cellphone, said he will comment on the matter next week.

Lakshmi Mittal—STEEL TYCOON

Steel tycoon Lakshmi Mittal, once labelled by Forbes as the third richest man in Britain, attempted to buy out Arcelor in Luxembourg in 2006 for $18.6 billion pounds cash and shares. The offer was rejected by Arcelor’s directors as hostile. Arcelor, created in 2002 from a merger of French, Luxembourg, Belgian and Spanish steel interests, warned against Mittal’s "irregular" profitability, pledging to consider "all options" to foil the hostile bid, according to an NBC news report in 2006. 

Two days later, prime minister Jean-Claude Juncker of Luxembourg, which held 5.6 per cent share in Arcelor, vowed to use “all necessary means” to fend off Mittal’s unsolicited offer.

After a couple months of negotiations, Arcelor finally agreed to the merger for $33.5 billion from Mittal.

SOURCE: www.guardian.co.tt

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