(Reuters) -Steelmaker ArcelorMittal’s talks to sell its South African unit to state-owned Industrial Development Corporation have stalled over valuation differences, Bloomberg News reported on Thursday, citing people familiar with the matter.
While the parties may still reach an agreement on the fate of ArcelorMittal South Africa before the end of a due diligence period on September 30, the company wants considerably more than what was offered, the report said.
Offers of as much as 7 billion rand ($398.6 million) for the South African unit have been discussed, the Bloomberg report said.
In an emailed response to Reuters, ArcelorMittal South Africa said it could not discuss the details of the process and would give updates about it in due course.
“The company has been exploring various strategic options while the IDC has simultaneously been conducting its due diligence into the company and the government has been pursuing structural interventions,” ArcelorMittal South Africa said in a statement to the Johannesburg Stock Exchange on Tuesday.
The Luxembourg-headquartered company said in July that talks with the South African government have so far yielded little progress to avert the closure of its loss-making long steel operations at its South African unit.
In March, ArcelorMittal South Africa deferred the closure after IDC injected 1.683 billion rand in cash.
The world’s number two steelmaker previously said the closure could no longer be postponed beyond September 30 unless a solution is found soon.
IDC holds about an 8.2% stake in ArcelorMittal South Africa, making it the second largest stakeholder after ArcelorMittal, according to data compiled by LSEG.
($1 = 17.5632 rand)
(Reporting by Disha Mishra and DhanushVignesh Babu in Bengaluru; Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Tomasz Janowski)
