ArcelorMittal to hike stake in JV with China’s Valin to 49 per cent
06 Jul 2012
ArcelorMittal today announced plans to increase its shareholding in Valin ArcelorMittal Automotive (VAMA), the downstream automotive steel joint venture with China's Valin Group, to 49 per cent from the existing 33 per cent.
VAMA is focused on establishing itself as a premier supplier of high-strength steels and value-added products for China's fast growing automotive market.
In line with the new shareholding agreement, Valin and ArcelorMittal will also increase their planned capacity by 25 per cent from 1.2 million tonnes to 1.5 million tonnes.
Capital investment will also increase by 15 per cent to RMB 5.2 billion and VAMA has signed purchase agreements totalling RMB 1.8 billion for key equipment, including cold rolling facilities, continuous annealing and galvanising lines.
The joint venture is expected to become operational in the first half of 2014.
In addition, ArcelorMittal could potentially recalibrate its share-holding in Hunan Valin Steel. The two companies have finalised a share swap arrangement based upon a put option mechanism, which enables ArcelorMittal to exercise the put options granted by Valin Group over the next two years.