Will Mittal close his plants?

Indian billionaire Lakshmi Mittal, who owns ArcelorMittal Hunedoara plant specialising in long steel products (SIDG) will decide next month whether to dissolve the company or feed 82.6 million euros into it following a capital increase by contribution in cash worth a total of 94 million euros.

“The decision is obviously to increase the capital, but has to be submitted to shareholders. The dissolution of the company is out of the question,” ArcelorMittal representatives said.

The plant’s need for cash comes after operating losses worth 222 million RON (52 million euros) piled up; as a result, its equity went down to less than half of the share capital value.

Another steel mill the billionaire owns, namely the plant in Roman, registered a negative book value worth 214.7 million RON (51 million euros) on March 31, 2010, and the law requires shareholders to either restore the capital or dissolve the company. Still, the mill’s management has not called upon shareholders to make a decision yet.

Last year was Mittal’s most difficult since arriving in Romania in 2001, as the crisis forced him to temporarily close a number of production facilities and make many employees redundant.