Saudi fund plans boosting stake in ArcelorMittal joint venture

Bloomberg

Saudi Arabia’s sovereign wealth fund is considering a plan to inject up to $300 million into a troubled steel pipe factory co-owned by ArcelorMittal, according to people
familiar with the matter.
The Public Investment Fund is looking at doubling its stake in ArcelorMittal Tubular Products Jubail to 40 percent by buying new shares and converting debt to equity, the people said, asking not to be identified as the information is private. The final terms of the deal have not been agreed and the plans could change, the people said.
ArcelorMittal established the plant in 2007 as a joint venture with the Al-Tanmiah Company, a unit of the Bin Jarallah Group. At the time, it said the plant would become the biggest supplier of steel pipes to the upstream oil and gas industry in the Middle East, producing over 600,000 tons of pipe a year and employing over 600 people.
However, the financial crisis, the Great Recession and the oil price collapse at the end of 2014 have all weighed heavily on the project, and ArcelorMittal admitted in its annual reports for both of the last two years that “Al Jubail’s financial situation has been negatively impacted by a slower than expected ramp-up of operations.”
In 2016, ArcelorMittal wrote the value of its equity investment down to zero. It continues to hold a stake of 40.8 percent in the venture.
ArcelorMittal has also partially written down additional investments made in the form of shareholder loans to the joint venture.