Suzanne Shep­pard

The Arcelor­Mit­tal plant at Point Lisas, cen­tral Trinidad, is just the lat­est to be closed by the glob­al steel gi­ant in re­cent months.

Since the lat­ter quar­ter of 2015, sim­i­lar sce­nar­ios have been play­ing out across Eu­rope, Africa and oth­er parts of the world where the multi­na­tion­al cor­po­ra­tion has ex­ten­sive in­dus­tri­al foot­prints.

The com­pa­ny, the world's lead­ing steel and min­ing com­pa­ny, is present in 60 coun­tries, has in­dus­tri­al op­er­a­tions in 19 coun­tries and pro­duces ap­prox­i­mate­ly ten per cent of the world's steel.

How­ev­er, af­ter re­port­ing a loss of US$8 bil­lion last year, in­clud­ing US$6.7 bil­lion in the fourth quar­ter, and in­cur­ring about US$16 bil­lion in debt, Arcelor­Mit­tal has been on a dri­ve to cut costs and raise cap­i­tal.

Just weeks be­fore the Point Lisas clo­sure, the com­pa­ny an­nounced plans to moth­ball one of its plants in Ses­tao, Spain, cit­ing "ex­treme­ly ad­verse" mar­ket con­di­tions in the Eu­ro­pean steel in­dus­try. The in­def­i­nite clo­sure is af­fect­ing ap­prox­i­mate­ly 330 jobs.

Last No­vem­ber, Arcelor­Mit­tal SA (AM­SA), the South African arm of the steel em­pire, re­ceived a bailout from that coun­try's gov­ern­ment to pre­vent plant clo­sures in two South African towns where the en­tire econ­o­my is de­pen­dent on that in­dus­try.

AM­SA of­fi­cials had ap­proached the Ja­cob Zu­ma-led gov­ern­ment for res­cue as­sis­tance claim­ing that oth­er­wise the plants would be closed, in­clud­ing a mas­sive fa­cil­i­ty at Van­der­bi­jl­park which em­ploys 4,500 peo­ple.

There are al­so re­ports that 12,000 steel­work­ers have been laid off across the Unit­ed States in re­cent months due to the tur­moil in the glob­al mar­ket.

In ad­di­tion to shut­ter­ing or scal­ing down plants to re­duce debt, Arcelor­Mit­tal is turn­ing to in­vestors, of­fer­ing its stock­hold­ers as many as sev­en new shares at US$2.44 per share for every ten they al­ready own. The com­pa­ny is hop­ing to raise some US$3 bil­lion by that route.

How­ev­er, chair­man and CEO Lak­sh­mi Mit­tal and his fam­i­ly will re­tain a 37 per cent stake in the com­pa­ny.

Gold­man Sachs, Bank of Amer­i­ca, Mer­rill Lynch, Bar­clays, BNP Paribas, Cit­i­group, JP Mor­gan and So­ci­ete Gen­erale Cor­po­rate and In­vest­ment Bank­ing are back­ing and fa­cil­i­tat­ing the sale of the ad­di­tion­al stock.

In an­oth­er bid to raise cap­i­tal, Arcelor­Mit­tal has sold its 35 per cent stake in Gestamp Au­to­mo­ci�n, a Span­ish mul­ti-na­tion­al en­gi­neer­ing com­pa­ny, to the ma­jor­i­ty share­hold­er, the Rib­eras fam­i­ly, for a to­tal cash con­sid­er­a­tion of �875 mil­lion.

The trans­ac­tion, which was fi­nalised last month, is un­con­di­tion­al and pay­ment is ex­pect­ed to be made to Arcelor­Mit­tal with­in six months. In ad­di­tion to the cash con­sid­er­a­tion, the steel com­pa­ny will re­ceive a pay­ment of �10m as a 2015 div­i­dend.

Lak­shi Mit­tal, the man be­hind the steel em­pire, is ranked as one of wealth­i­est men in Britain, al­though he does not hold British cit­i­zen­ship. He is the 57th "most pow­er­ful per­son" of the 72 named in Forbes' Most Pow­er­ful Peo­ple list for 2015.

Arcelor­Mit­tal was cre­at­ed by the takeover of West­ern Eu­ro­pean steel mak­er Arcelor by In­di­an-owned multi­na­tion­al steel mak­er Mit­tal Steel in 2006. The re­sult­ing merged busi­ness is head­quar­tered in Lux­em­bourg.

The com­pa­ny came in­to T&T in 1989 as Caribbean Is­pat af­ter par­ent com­pa­ny, then known as Is­pat In­ter­na­tion­al, ac­quired the for­mer state-owned Iron and Steel Com­pa­ny of T&T (IS­COTT). The lo­cal plant has the ca­pa­bil­i­ty of pro­duc­ing 550,000 met­ric tonnes of hot bri­quet­ted iron (HBI) an­nu­al­ly.

Be­sides HBI, it can al­so pro­duce bil­let and wire rod coils. More than 90 per cent of the plant's out­put was ex­port­ed to the Caribbean, Cen­tral and South Amer­i­ca, Cana­da, the Unit­ed States and the Far East.

Mit­tal Steel was orig­i­nal­ly set up in 1976 by Mit­tal, who steered the com­pa­ny's rapid growth over the years by com­bin­ing a suc­cess­ful con­sol­i­da­tion strat­e­gy with a num­ber of ma­jor ac­qui­si­tions.

Apart from T&T, the steel gi­ant's oth­er ma­jor ac­qui­si­tions in­clud­ed Siderur­gi­ca del Bal­sas (Mex­i­co) in 1992, Sid­bec (Cana­da) in 1994, Karmet (Kaza­khstan) and Ham­burg­er Stahlw­erke (Ger­many) in 1995, Thyssen Duis­burg (Ger­many) in 1997, In­land Steel (US) in 1998, Unimet­al (France) in 1999, Sidex (Ro­ma­nia) and Anna­ba (Al­ge­ria) in 2001, No­va Hut (Czech Re­pub­lic) in 2003, BH Steel (Bosnia), Balkan Steel (Mace­do­nia), PHS (Poland) and Is­cor (South Africa) in 2004, ISG (US), Kryvorizh­stal (Ukraine).

The com­pa­ny al­so gained a sig­nif­i­cant in­ter­est in Hu­nan Valin Steel (Chi­na) in 2005, as three Stel­co Inc sub­sidiaries in Cana­da in 2006.

At the time of the merg­er with Mit­tal Steel, Arcelor was the sec­ond largest steel pro­duc­er in the world.

Last year, Arcelor­Mit­tal's glob­al op­er­a­tions had rev­enues of US$63.6 bil­lion and crude steel pro­duc­tion of 92.5 mil­lion tonnes, while its own iron ore pro­duc­tion reached 62.8 mil­lion tonnes.