Riyadh – Mubasher: Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), is mulling over injecting about $300 million into ArcelorMittal’s troubled steel pipe plant.
The PIF is also weighing up doubling its stake in ArcelorMittal to 40% by purchasing new shares and converting debt to equity, sources with knowledge of the matter told Bloomberg News.
The two parties have not reached a deal over the final terms of this transaction, the source said, adding that the schemes could change.
The Saudi investment body plans to raise investments in ArcelorMittal as part of Saudi Vision 2030, intended to diversify the kingdom’s economy and invest more heavily in infrastructure.
“The PIF wants to use the ArcelorMittal plant to build Saudi Arabia’s position as a supplier of pipes for the energy sector as part of its plans to support non-oil industries, it said in a strategy document published last year,” Bloomberg reported.
In 2007, the world's largest steelmaker, ArcelorMittal, set up the plant as a joint venture with the Al-Tanmiah Company, a unit of the Bin Jarallah Group. At the time, it said that the factory will be the biggest supplier of steel pipes to the upstream oil and gas industry in the Middle East with an annual estimated production of 600,000 tonnes of pipe.
However, the financial crisis, the Great Recession and the slippage of global oil prices at the end of 2014 have taken their toll on the project.
