ArcelorMittal is entering a joint venture (JV) with DryLog Ltd. (DryLog) wherein the steelmaker will gain access to 25 of DryLog’s 28 dry cargo vessels. ArcelorMittal is likely to use the JV to handle its extensive cargo shipments across the world.
The 50pc stake specifically involves DryLog’s wholly owned Global Chartering Limited (GCL), which has a fleet comprising everything from Supramax to Cape Size vessels. ArcelorMittal, the world’s largest steelmaker, also has significant mining interests and is likely to use these vessels to ship ore and finished products.
The stake and JV’s nature will affect ArcelorMittal’s net debt by $530mn, of which $400mn due are expected before the end of 2019, and the remaining $130mn due are likely sometime early next year. Moreover, the transaction, still in its purchase agreement phase, is expected to become integral to ArcelorMittal’s commitment to free $2bn of value from its asset portfolio by the middle of 2021.
DryLog has technical expertise in transportation and commercial vessel management, which is being billed as a way to grow the JV’s operational acumen and turn it into a major player in the international shipping industry.