ArcelorMittal S. Africa Eyes $220 Million Macsteel Windfall

(Bloomberg) -- ArcelorMittal’s South African unit agreed to sell its half of steel trader and shipper Macsteel International Holdings BV to a company founded by South African steel billionaire Eric Samson, which owns the other 50 percent.

Macsteel Holdings Luxembourg SARL will pay $220 million for the stake, ArcelorMittal South Africa Ltd. said in a statement Monday. That’s more than the Johannesburg-traded company’s market capitalization of about $197 million.

Samson, who made his fortune in steel and real estate assets through his Macsteel holding company, was in 2015 valued at $1.1 billion, according to the Bloomberg Billionaire Index. He’s valued at at least $1 billion, according to researcher Wealth-X’s website.

AMSA, as the South African company is known, said the sale of its holding in Macsteel International will help raise cash to strengthen its balance sheet. The funds will also be used for working capital and other investments, the Vanderbijlpark-based steelmaker said in a statement.

AMSA, which is South Africa’s largest producer of the products, originally supplied most of the steel for the Macsteel joint venture, but that’s no longer the case, the company said.

“The investment is no longer considered to be a core asset for AMSA,” it said. The company has also secured approvals from lenders on its revolving finance facility for the proposed sale, which is expected to be finalized on July 1.

While global steelmakers including parent ArcelorMittal are enjoying the best market conditions in years, the South African company has been hurt by weak domestic demand, pressure from imports and volatility in the rand-dollar exchange rate.

AMSA shares have declined 44 percent this year to 2.15 rand.

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