Czech govt sees deal over € 700mn Mittal Steel claim

PRAGUE: The Czech government and Mittal Steel have made a "breakthrough" in negotiations that should end the steel giant's 700-million-euro claim over its exclusion from bidding for state-owned Vitkovice Steel, the finance ministry said on Tuesday.

Mittal Steel representatives promised during negotiations yesterday to table an offer that would end its arbitration claims "without any financial obligations for the Czech Republic," the ministry said.

Mittal Steel lodged an arbitration claim in 2005 citing Prague's failure to protect its rights under a bilateral investment agreement with the Netherlands. The claim was sparked after Mittal was excluded from bidding for Vitkovice Steel, one of the biggest Czech steel companies.

The Czech government eventually sold the company to the Russian-based Evraz Group for 252.7 million euros.

Dutch-based Mittal Steel Group already had a 70.67 per cent stake in the country's biggest steelmaker, Mittal Steel Ostrava, formerly Nova Hut, when it bid for Vitkovice.

Mittal Steel last June acquired European steel maker Arcelor and the company is now known as Arcelor Mittal.