Ostrava, August 20 (ČTK)- Minority shareholders of ArcelorMittal Ostrava (AMO) protested this morning before the start of their Extraordinary General Meeting, where they are to decide upon the use of company shares to secure loans. According to the parent company, ArcelorMittal, this step will make transactions inside the group easier. The minority shareholders believe that it’s just fictitious collateral, meant to be just another blank check, shareholder and initiator of the protest, Jiří Psota, told ČTK.
The majority owner of the Ostrava steelworks, ArcelorMittal Holding AG, want to be able to use up to one quarter of its common shares (to a maximum of 2.943 million shares) that they hold in the Ostrava daughter company for five years. Their request would make transactions among the group easier and make their business more effective.
“What concrete debts – if they already exist, or will be created – will be guaranteed by the collateral, to what extent and when, shareholders won’t know until the end of the accounting period, in which the collateral rights were created,” said the Director for External Affairs Jan Rafaj.
The minority shareholders are not happy with this explanation. They believe that the steel mill doesn’t want to share information for whom and how high the loan from the collateral shares will be.
According to Psota, the parent company wants to use the AMO shares as collateral in the event that they won’t be able to pay back the amount already loaned by AMO. “Should there be a reason to use the collateral, it is then logical that the shares used will lose their value. On the open market, this 25% will not sell and no financial group would ever purchase a minority in a business where the majority is extracting money and not paying it back,” said Psota to CTK.
For these reasons, the minority shareholders of AMO, who own 3,5%, do not agree that ArcelorMittal, as the majority shareholder, has forced the local Ostrava company to accept these fictitious guarantees for the credit that AMO has already provided to its parent company. Low-interest loans in the amount of 24.5 billion CZK have already been provided, and thanks to currency losses, another estimated 750 million CZK have been lost, added Psota.
The minority shareholders protested this morning in front of the venue of the general meeting. Large signs saying “We won’t let ourselves be plucked” were hung, and slogans such as “return the money to Ostrava” were shouted into megaphones.
These are shares in the Ostrava steel mill that are held by the majority shareholder – parent company, ArcelorMittal, owned by Indian national, Lakshmi Mittal, Psota added.
The majority owner of the Ostrava steelworks, ArcelorMittal Holding AG, want to be able to use up to one quarter of its common shares (to a maximum of 2.943 million shares) that they hold in the Ostrava daughter company for five years. Their request would make transactions among the group easier and make their business more effective.
“What concrete debts – if they already exist, or will be created – will be guaranteed by the collateral, to what extent and when, shareholders won’t know until the end of the accounting period, in which the collateral rights were created,” said the Director for External Affairs Jan Rafaj.
The minority shareholders are not happy with this explanation. They believe that the steel mill doesn’t want to share information for whom and how high the loan from the collateral shares will be.
According to Psota, the parent company wants to use the AMO shares as collateral in the event that they won’t be able to pay back the amount already loaned by AMO. “Should there be a reason to use the collateral, it is then logical that the shares used will lose their value. On the open market, this 25% will not sell and no financial group would ever purchase a minority in a business where the majority is extracting money and not paying it back,” said Psota to CTK.
For these reasons, the minority shareholders of AMO, who own 3,5%, do not agree that ArcelorMittal, as the majority shareholder, has forced the local Ostrava company to accept these fictitious guarantees for the credit that AMO has already provided to its parent company. Low-interest loans in the amount of 24.5 billion CZK have already been provided, and thanks to currency losses, another estimated 750 million CZK have been lost, added Psota.
The minority shareholders protested this morning in front of the venue of the general meeting. Large signs saying “We won’t let ourselves be plucked” were hung, and slogans such as “return the money to Ostrava” were shouted into megaphones.
These are shares in the Ostrava steel mill that are held by the majority shareholder – parent company, ArcelorMittal, owned by Indian national, Lakshmi Mittal, Psota added.
Photos from the protest are available here.
This is highly unethical and very bad business at best, and at worst, bordering on the criminal. Good luck with the protest!
ReplyDeleteYes, Im with you guys
ReplyDelete