London: World's largest steel manufacturer ArcelorMittal is selling its LaPlace and Vinton Long Carbon
facilities in the US to an affiliate of the asset management firm Black Diamond Capital Management.
Financial details of the deal were however not disclosed. The deal will help the Luxembourg-based steel maker to reduce its debt that stood at USD 15.7 billion for the quarter ended December 2015.
The company, led by billionaire Lakshmi Mittal, in a regulatory filing said it has entered a "definitive transaction agreement to sell its LaPlace and Vinton Long Carbon facilities in the US to an affiliate of Black Diamond Capital Management."
Terms of the transaction are confidential and not being disclosed, said the filing issued yesterday.
The LaPlace facility in Louisiana along with a rolling mill in Harriman (Tennessee) manufactures steel billets, flats, channels, angles and beams. The Vinton facility, located in El Paso in Texas produces rebar and grinding media.
"Simultaneously, ArcelorMittal has entered a transition services agreement with Black Diamond, in order to facilitate a smooth transition period and ensure no business disruption," the company said.
ArcelorMittal North America Executive VP and CEO Jim Baske said: "The sale of LaPlace and Vinton is consistent with ArcelorMittal's stated strategy of selective divestment of non-core assets. I would like to thank the employees of
LaPlace and Vinton for their commitment and efforts over the years, and wish them a successful future under new ownership."
Black Diamond manages over USD 8 billion in assets, across its three lines of business: Control Distressed/Private Equity, Hedge Fund and CLOs and other structured vehicles.
The steel giant, which continued to suffer from Chinese industry's overcapacity that has driven the world prices down,
reported a decline in net sales at USD 63.58 billion in 2015 against USD 72.28 billion in 2014.
Its net loss at USD 7.9 billion in 2015 was mostly due to USD 4.8 billion write-downs on the iron ore mining business and a USD 1.3 billion charge on inventory owing to the global steel price plunge. A year earlier, the group made a loss of USD 1.1 billion.