ArcelorMittal (MT) is nearing a deal with the South African government to secure funding for its local unit and keep its steel mills running, Bloomberg reported Tuesday, citing sources familiar with the matter.
The government plans to provide an initial 500 million rand ($27.57 million) to pay steelworkers for the next six to eight months, the media outlet reported.
Discussions are reportedly ongoing about additional bridge financing through the state-owned Industrial Development Corp., which may increase its stake in ArcelorMittal South Africa. The government wants AMSA to consider selling the two mills it plans to close in Vereeniging and Newcastle.
A decision on the deal could be announced soon, with AMSA's board meeting to review the proposals, Bloomberg reported. AMSA is reportedly seeking 3 billion rand to keep the mills open for another year.
ArcelorMittal and IDC did not immediately respond to requests for a comment from MT Newswires.
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