ArcelorMittal South Africa may receive a $491 million bid for its business

South Africa’s Industrial Development Corp. (IDC) is working with financial advisors on a possible offer of around 8.5 billion rand ($491 million) for control of ArcelorMittal South Africa (AMSA)’s business in the country. This was reported by Bloomberg, citing sources.

If the bid is successful, it will include the assumption of debt obligations. This will conclude nearly two years of negotiations between the state-owned IDC, the government’s Department of Trade and Industry, and the steel producer.

It could also pave the way for other international steel companies, as IDC plans to seek strategic investors to manage AMSA’s operations, insiders said.

The proposal, which will be largely financed by IDC, will mainly repay a loan provided by ArcelorMittal to its South African unit and will also include a cash component.

No final decisions have been made, and the deal may not be completed, the sources said. The parties declined to comment to the agency.

IDC is the largest shareholder in ArcelorMittal South Africa and has signed a six-month agreement with the company to conduct a comprehensive review of its business. The agreement expires on September 30.

In addition to its long product operations, AMSA operates a flat product plant in Vanderbijlpark. It also owns idle capacity in Pretoria and Saldanha, as well as a closed iron ore mine.

Earlier, Zvelinzima Wavi, general secretary of the South African Federation of Trade Unions (SAFTU), said that the South African government should “renationalize” AMSA to prevent job losses and revive the country’s industry. In September this year, the company began to close down its long-product manufacturing assets in the country, which employ about 3,500 people and support up to 100,000 indirect jobs.