Joint venture between ArcelorMittal and Drylog is formed

ArcelorMittal, the globally prominent steel and mining company, has disclosed the signing of a share purchase agreement with DryLog Ltd (DryLog) for the divestment of a 50% share in Global Chartering Limited (GCL), its wholly owned shipping business. Following this, a 50:50 shipping joint venture with DryLog will be established, and the transaction is anticipated to conclude by the close of 2019. Presently, GCL manages 28 dry cargo vessels, encompassing Supramax to Cape Size categories. Out of these, 25 vessels are under long-term leases and will be transitioned to the joint venture, while the remaining three are fully owned by ArcelorMittal.

The joint venture is poised to leverage the combined knowledge and expertise of both entities, capitalising on ArcelorMittal’s substantial annual cargo commitments, with a segment exclusively managed by the JV. Additionally, the venture will benefit from DryLog’s proficiency in optimising transport solutions and its technical and commercial vessel management capabilities. These synergies are expected to propel the joint venture into a significant position within the global shipping industry. The sale of the stake and the formation of the joint venture will have a consequential impact on ArcelorMittal’s net debt, resulting in a reduction of $530 million, with $400 million realized upon completion and an additional $130 million expected in early 2020.

This strategic move aligns with ArcelorMittal’s commitment to unlocking up to $2 billion in value from its asset portfolio by the middle of 2021.