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Lakshmi Mittal's ArcelorMittal to sell LaPlace, Vinton steel plants in US

The sale of its units will help the company to reduce its debt that stood at $15.7 billion (nearly Rs 1.04 lakh crore) for the quarter ended December 2015.

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Lakshmi Mittal, Chairman and Chief Executive Officer, ArcelorMittal
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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 steelmaker to reduce its debt that stood at $15.7 billion (nearly Rs 1.04 lakh crore) 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 on Thursday.

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 $8 billion (nearly Rs 53,222 crore) 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 $63.58 billion (nearly Rs 4.23 lakh crore) in 2015 against $72.28 billion (nearly Rs 4.81 lakh crore) in 2014.

Its net loss at $7.9 billion (nearly Rs 52,556.73 crore) in 2015 was mostly due to $4.8 billion (nearly Rs 31,933.2 crore) write-downs on the iron ore mining business and a $1.3 billion (nearly Rs 8,648.575 crore) charge on inventory owing to the global steel price plunge. A year earlier, the group made a loss of $1.1 billion (nearly Rs 7,318.03 crore).  

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