ArcelorMittal's ambitions to strengthen its presence in China has hit a roadblock with the world's largest steel maker putting on hold the plans to buy majority stake in China Oriental.
The Financial Times has reported that the steel giant has been forced to put its plans for taking a majority stake in a Chinese steel maker on hold.
Quoting India-born Lakshmi Mittal, who is the chief executive and main shareholder of ArcelorMittal, the daily said that it looked as if the firm would have to settle for just under 30 per cent stake in Hong Kong-listed China Oriental, even though it had at one time appeared confident of holding more than 70 per cent.
"We may have to accept less than we wanted... If this happens, I will be disappointed. But a stake in the company of 30 per cent or so still is very useful for us," he told the newspaper.
Hong Kong-listed China Oriental is a leading steel maker and its mid-sized steel mill in the Northern province produces about four million tonnes of steel a year.
Lakshmi Mittal also told the daily that the "Chinese government was still not happy with the idea of a foreign steel maker controlling a leading steel producer."
In December 2007, ArcelorMittal and China Oriental had announced that the world's largest steel maker is buying a 73.13 per cent stake in the firm.
According to Financial Times, this year ArcelorMittal was forced to sell back some of its shares in the company to restore a free float of more than 50 per cent.
"It now emerges that ArcelorMittal is unlikely to win approval by Beijing to buy all the shares it wanted from existing investors. As a result, ArcelorMittal will be left with a stake of 29 per cent," the report added.
