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Mittal's bailout bid for brother
Richard Orange, in Mumbai22.05.08
Lakshmi Mittal, Britain's richest man, has bailed out his younger brother Pramod's ailing Bulgarian plant, Kremikovtzi Steel, and could clinch a $700 million (£357 million) deal to buy it as early as next week.
ArcelorMittal, the world's biggest steel company, has begun exclusive talks with holders of the plant's €325 million (£259 million) of bond debt, shutting out rival bidder Konstantin Zhevago.
ArcelorMittal this week provided €30 million in emergency funds to keep the plant turning over.
Pramod Mittal has run into difficulties this year with Kremikovtzi hitting financial straits. Bondholders had threatened to put Kremikovtzi into bankruptcy, giving them rights over the share held by Pramod's Global Steel Holdings, and allowing them negotiate their own sale.
A source close to Global Steel said Mittal has now offered to pay $180 million on completion of the deal, hand $500 million to creditors and invest $500 million in the plant.
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