The Minister of Industry and Construction of the Republic of Kazakhstan, Kanat Sharlapayev, announced at a briefing that after eleven rounds of negotiations, the purchase of Arcelor Mittal Temirtau has been completed. Divulging the details of the deal, Sharlapayev stated that “$286 million is the cost of two fully functioning enterprises. In addition, ArcelorMittal will not make any claims against the Government of Kazakhstan. The agreement was reached within the legal framework, in full compliance with international law.”
Against a backdrop of ongoing incidents at ArcelorMittal Temirtau JSC, in August of this year, President of the Republic of Kazakhstan Kassym-Jomart Tokayev pointed out serious violations by the company. The Head of State stated that consequences for the enterprise to remain in the Kazakh market were not excluded for AMT.
At the time this statement was made, the government was already negotiating with the owners of ArcelorMittal Temirtau on the possible withdrawal of the company from the metallurgical plant. These talks began after the tragic accident that occurred on November 3rd 2022 at the Lenin Mine, a subsidiary of AMT. As a result of these intensive negotiations, on December 9th 2022, a “Standstill Agreement” was signed, which allowed the authorities to evaluate and audit the enterprise. During the negotiations, ArcelorMittal requested $3.5 billion, which did not correspond to the calculations of international consultants.
“This became one of the main reasons for the protracted negotiation process,” Sharlapayev said. “Our goal was to purchase the plant at a fair price without incurring costly and protracted international litigation. The urgency and acceleration of the negotiations were also dictated by the need to prevent the shutdown of the enterprise. The agreement between the Government of Kazakhstan and ArcelorMittal can be called a mega-deal, which is of exceptional importance to our country. We have avoided a lot of risks faced by the governments of other countries,” the minister stressed.
Sharlapayev also announced three key elements of the deal:
– The state has reduced the value of assets from $3.5 billion to $286 million;
– Not a single tenge was spent from the state budget on the implementation of the transaction;
– The new investor undertakes an obligation to the parent company, ArcelorMittal, to repay a short-term loan of $250 million and a long-term loan of $450 million over four years.[/vc_column_text][/vc_column][/vc_row]