The Hindu Business Line : Laxmi Mittal likely to dilute stake in Group as profits decline

It is revealed that Mr Laxmi Mittal, who is one of the richest British businessman of Indian origin, is considering reducing his financial stake in the Mittal Group as profits decline.

Mr Mittal told Financial Times that he would be willing to dilute his 86 per cent stake in the Mittal Steel Group, rated as the world's largest steel company with a production of 51 million tonnes, which may rise to 80 to 100 million tonne-mark in the next few years. Mr Mittal is a Kolkata-born businessman and comes from a prominent family of steel manufacturers.

From Kolkata, Mr Laxmi Mittal moved to Indonesia and since then has expanded his steel production base in various countries. The latest announcement comes as Mr Mittal revealed 15 per cent drop in profits. The company may sell $2 billion worth of shares in the market to finance further acquisitions and expansion.

Financial analysts point out that the Mittal Group has only attracted limited interest from investment fund manager because it is a tightly controlled family concern almost owned by an individual. The Mittal Group is in the process of acquiring State-owned loss making companies in Turkey and Ukraine. This acquisition could cost the group $2 billion, and, according to analysts, the group is also keen to buy steel companies in China. However, the recent fall in steel demand in China has led to fall in its price, which is now hovering round the $450-mark compared to $640 in first quarter of 2004.

On Thursday, Mittal shares — listed in New York and Amsterdam exchanges - fell three per cent to trade at 23.46 euro. Analysts expect Mittal Group to sell another lot of 15 per cent so that public ownership could come to 25 per cent.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page