10 May 2005
ALL IN FAMILY - Mittals snap up Turkish plant
To pay $78.4 m for 1 mt Izmir unit
SUMAN Layak Mumbai
GLOBAL STEEL Holdings, a company privately owned by P.K. Mittal and Vinod Mittal, has snapped up a one-million tonne steel plant in Turkey through a leveraged buy-out deal worth $78.4 million.
The Izmir Steel Plant (Izmir Demik Celik) has a steel-making capacity of one million tonne and 8.5 lakh tonnes of rolling mill capacity. It also has a 6.5 lakh tonne cold-rolling mill. Global Steel has acquired a 54.68% stake in the company. The plant also has a captive port.
The Mittal brothers also own the publicly owned Ispat Industries in India and are younger brothers of world's largest steel maker L.N. Mittal.
After the current buyout, the combined capacity of the group reaches around 15 million tonnes.
A Global Steel official said the deal would be financed through a mix of equity and debt. The brothers could not be contacted as both were travelling outside India. The group also has assets in Philippines, Nigeria, Bulgaria, Bosnia, Libya and India.
The company has acquired the stake from an Istanbul-based bank, Turkiye Is Bankasi AS, the largest private sector bank in Turkey. The Turkish government has asked banks to trim stakes in different industries. The agreement was signed late last year.
The rest of the shares in the company are held by private investors in Turkey and the scrip is listed on the Istanbul Stock Exchange. The Turkish company posted a net profit of 29.5 million euros (Turkish lira 51.36 million) for 2004, recovering from a TL14.42 million net loss in the previous year. About 75% of the company's products are exported.
Turkey is likely to see a lot of action by global steel makers with like Mittal Steel and Arcelor announcing their interest in the largest Turkish steel mill, the government-owned Eregli Demir & Celik Fabrikalari.
The empire strikes
Philippines: 3 million tonnes steelmaking capacity Nigeria: 4 million tonnes steel making capacity plus 260 mt iron ore reserves Libya: 1.8 million tonnes steel making capacity Bulgaria: 2.2 million tonnes steelmaking capacity Bosnia: 1.4 million tonnes coke oven facility India: Ispat Industries three million tonnes steelmaking capacity
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