The Ayigobi consortium hoped to remain the black economic empowerment (BEE) partner of ArcelorMittal South Africa, despite a setback in the steel maker’s relations with key consortium members, the consortium said yesterday.
“As Ayigobi we remain very keen to partner with ArcelorMittal SA,” said its leader Sandile Zungu.
Zungu was speaking after another twist in ArcelorMittal SA’s long-running pricing dispute with Kumba Iron Ore, this time a joinder application by the steel maker in which it has taken sides with arch-rival Kumba Iron Ore by asking the North Gauteng High Court to set aside a 21.4 percent prospecting right at Sishen granted to Imperial Crown Trading (ICT).
ArcelorMittal SA’s application to join the proceedings is due to be heard on Thursday.
ArcelorMittal SA last year announced an R800 million deal to buy ICT, subject to a due diligence investigation into, among other things, how ICT secured the Sishen rights, which the steel firm previously held.
ArcelorMittal SA simultaneously presented Ayigobi as its BEE partner, with ICT shareholders securing half of a 21 percent stake in ArcelorMittal SA’s underlying assets, and some of their associates a portion of the other half, including President Jacob Zuma’s son Duduzane.
ArcelorMittal SA’s due diligence into ICT is due to be completed around the end of this month, and there is speculation its contents may have influenced the decision to side with Kumba against ICT in the legal proceedings.
ArcelorMittal SA has not made public the results of the due diligence probe. Spokesman Themba Hlengani said yesterday the company was not commenting.
Zungu, who is not a shareholder of ICT, said: “We watch with interest the unfolding events around ArcelorMittal SA’s relationship with Kumba and ICT, which is obviously outside of our scope of interest.”
Asked whether other Ayigobi partners would be prepared to remain in the consortium without ICT shareholders or their associates, Zungu said: “That is a hypothetical question, I don’t wish to comment.”
He said that the Ayigobi consortium’s 25 percent share reserved for broad-based partners had not been allocated and “still needs to be finalised”.
After a public outcry against the deal last year, the Gupta family and Duduzane Zuma announced they were donating to charity 70 percent of their share in the deal.
There is talk of ArcelorMittal SA chief executive Nonkululeko Nyembezi-Heita restructuring the BEE deal after it met with shareholder resistance, but it is unclear if ICT or other Ayigobi members would be involved.
A BEE deal would pave the way for ArcelorMittal SA to secure mineral ore supplies in its bid to protect against high feedstock prices for steel firms.
Contacted yesterday, ICT head Jagdish Parekh said: “It would be very difficult to get comment from ICT on this purely because it’s in court right now.” He referred queries to ICT’s lawyer Ronnie Mendelow, but he was abroad. - Business Report