Circular to ArcelorMittal Shareholders (ESOP) - ArcelorMittal South

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Corporate information

Company Secretary of ArcelorMittal Nomonde Bam 3rd Floor, Main Building Delfos Boulevard Vanderbijlpark, 1911 South Africa (PO Box 2, Vanderbijlpark, 1900)

Legal and Tax Advisers Edward Nathan Sonnenbergs Inc. (Registration number 2006/018200/21) 150 West Street Sandton, Johannesburg, 2146 (PO Box 783347, Sandton, 2146)

Registered Office of ArcelorMittal Room N3-3, Delfos Boulevard Vanderbijlpark, 19111 South Africa (PO Box 2, Vanderbijlpark, 1900)

Reporting Accountants and Auditors Deloitte & Touche Deloitte Place, Building 1 The Woodlands 20 Woodlands Drive Woodmead 2052 South Africa Place and date of incorporation of ArcelorMittal Incorporated in South Africa on 9 June 1989

Sponsor to ArcelorMittal JP Morgan Equities South Africa Proprietary Limited Fricker Road Corner Hurlingham Road, Illovo Sandton, 2196 South Africa Transfer Secretaries to ArcelorMittal Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street Johannesburg, 2001 South Africa (PO Box 61051, Marshalltown, 2107)

Table of contents

Clause number and description Corporate information

Page Inside front cover

Action required by ArcelorMittal Shareholders

1

Important dates and times

2

Definitions and interpretations

3

Circular to ArcelorMittal Shareholders

7

PART 1: INTRODUCTION

7

PART 2: THE SCHEME, THE DISPOSAL AND RELATED FINANCIAL ASSISTANCE

8

1.

8

Introduction

2. Key features of the scheme

9

3. The disposal

10

4. Financial assistance relating to the scheme

10

5. Pro forma financial information

11

PART 3: FINANCIAL ASSISTANCE RELATING TO THE LTIP

13

PART 4: GENERAL

14

1. The Company’s capital structure

14

2. Information on the directors and management

14

3. Expenses

15

4.

Market value of ArcelorMittal shares

15

5. Business of ArcelorMittal and its subsidiaries

15

6. Opinion and recommendation

16

7. Directors’ responsibility statement

16

8. Experts’ consents

16

9. Documents available for inspection

16

10. General meeting

16

Annexure 1: Information on Directors and Management

18

Annexure 2: Price and trading history

21

Annexure 3: Pro Forma Financial Information Relating to the Scheme

22

Annexure 4: Accountants' Report on the Pro Forma Financial Information

27

Notice of General Meeting

Attached

Form of proxy (grey)

Attached

Actions required by Shareholders The definitions and interpretations commencing on page 3 of this Circular apply mutatis mutandis to this section. Please take careful note of the following provisions regarding the actions required by shareholders: This Circular contains important information regarding the matters to which it relates. You should carefully read through this Circular and decide how you wish to vote on the resolutions to be proposed at the General Meeting. Shareholders should not construe anything in this Circular as legal, business or tax advice. Shareholders who are in any doubt as to what action to take should consult their CSDP, broker, banker, accountant, attorney or other professional adviser immediately. If you have disposed of all of your Shares in ArcelorMittal, then this Circular, together with the attached notice of General Meeting and form of proxy, should be forwarded to the purchaser to whom, or the Broker, agent, CSDP or banker through whom you disposed of your Shares. General meeting A General Meeting of ArcelorMittal Shareholders will be held at 09h00 on Friday, 18 September 2015 at The Hyatt Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg, in order to consider and approve the resolutions set out in the notice of General Meeting included in this Circular. The notice convening the General Meeting is attached to this Circular. Certificated Shareholders and “Own Name” Dematerialised Shareholders A notice convening the General Meeting and a form of proxy for use by Certificated Shareholders and Dematerialised Shareholders with “own name” registration who are unable to attend the General Meeting, form part of this Circular. You are entitled to attend, or be represented by proxy, at the General Meeting. If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and are requested to return the attached form of proxy [grey], in accordance with the instructions contained therein, to be received by the Transfer Secretaries, by no later than 09h00 on Wednesday, 16 September 2015. Forms of proxy not lodged with the Transfer Secretaries in time may be handed to the chairman of the General Meeting immediately before the commencement of the General Meeting. Dematerialised Shareholders, other than Dematerialised Shareholders with “own name” registration You must not complete the attached form of proxy [grey]. If you are unable to attend the General Meeting and wish to be represented thereat, you must provide your CSDP or Broker with your voting instructions, in terms of the Custody Agreement entered into between you and your CSDP or Broker, in the manner and within the time stipulated therein; If you wish to attend the General Meeting in person, you must instruct your CSDP or Broker to issue you with the necessary written letter of representation to attend.

1

Important dates and times

2015 Announcement released on SENS on

Friday, 31 July

Record date to determine which Shareholders are eligible to receive notice of the General Meeting

Friday, 7 August

Circular posted to ArcelorMittal Shareholders on

Wednesday, 19 August

Further announcement released on SENS on3

Wednesday, 19 August

Last day to trade in order to be eligible to attend, participate and vote at the General Meeting

Friday, 4 September

Record date to determine which Shareholders are eligible to attend, participate and vote at the General Meeting

Friday, 11 September

Last day to lodge forms of proxy for the General Meeting by 09h00 on

Wednesday, 16 September

General Meeting to be held at 09h00 on

Friday, 18 September

Results of General Meeting released on SENS on

Friday, 18 September

Notes: 1.

The above dates and times are subject to amendment. Any such amendment will be released on SENS.

2.

Additional copies of this Circular, in its printed format, may be obtained from the Sponsor at the address set out in the “Corporate information” section of this Circular during normal business hours from Wednesday, 19 August 2015 up to and including, Friday, 18 September 2015.

3.

Will contain the updated pro forma financial effects based on the latest reviewed results for the interim period ended 30 June 2015.

2

Definitions and interpretations In this Circular, the notice of general meeting and form of proxy, unless the context otherwise indicates, references to the singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words in the first column hereunder have the meaning stated opposite them in the second column, as follows: "Allocated Trust Units"

Trust Units which have been notionally allocated by the Trustees to Qualifying Employees, and which have been accepted by such Qualifying Employees, each in accordance with the provisions of the Trust Deed;

"Allocation Date"

the date on which Trust Units are notionally allocated to Qualifying Employees and/ or Beneficiaries, as the case may be, being the First Allocation Date, and, in respect of subsequent allocations, the date determined by ArcelorMittal and notified in writing to the Trustees;

"ArcelorMittal" or "the Company"

ArcelorMittal South Africa Limited (Registration number 1989/002164/06), a public company duly registered and incorporated in accordance with the laws of South Africa, whose ordinary shares are listed on the securities exchange operated by the JSE, being the founder of the Trust;

“ArcelorMittal Group”

ArcelorMittal, as well as any Subsidiary of ArcelorMittal established or acquired after the First Allocation Date pursuant to an acquisition of either the shares or the business of any third party not forming part of the ArcelorMittal Group, and which results in the employees of such third party becoming eligible to participate in the Scheme;

"ArcelorMittal Related Shares"

those Trust Shares in respect of which Trust Units have been notionally allocated and to which such Trust Units shall notionally correspond;

"ArcelorMittal Shareholders" or "Shareholders"

registered holders of ArcelorMittal Shares;

"ArcelorMittal Shares" or "Shares"

ordinary shares with no par value in the issued share capital of ArcelorMittal;

"BBBEE Act"

the Broad Based Black Economic Empowerment Act, 53 of 2003, as amended;

"BEE"

Broad-Based Black Economic Empowerment, as defined in the BBBEE Act;

"Beneficiary"

a Qualifying Employee who becomes a beneficiary of the Trust in accordance with the provisions of the Trust Deed;

"Beneficiary Cash Claim"

in respect of each Beneficiary, a right to the Net Cash Reserves attributable to his Allocated Trust Units, on the basis that each Allocated Trust Unit will bear a proportionate share of the total Net Cash Reserves, as determined in accordance with the provisions of the Trust Deed;

"Board" or "Directors"

the members of the board of directors of ArcelorMittal, at the Last Practicable Date, whose details are set out on page 18 of this Circular, or in respect of the Trust Deed, the members of the Board from time to time, or the Remuneration, Social and Ethics Committee of ArcelorMittal, as the case may be;

"Broker"

is a person registered as a broking member (equities) in terms of the Rules of the JSE made in accordance with the provisions of the Financial Market Act;

"Business Day"

any day other than a Saturday, Sunday or a statutory holiday in South Africa;

"Capital Right"

in respect of each Allocated Trust Unit, a right of the Beneficiary to receive the Net Capital Proceeds attributable to an ArcelorMittal Related Share;

"Certificated Share"

an ArcelorMittal Share that has not been Dematerialised, title to which is evidenced by a physical Document of Title;

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"Certificated Shareholder"

an ArcelorMittal Shareholder who holds Certificated Shares;

"Circular"

this bound document, dated 19 August 2015, incorporating a notice of general meeting and a form of proxy;

“Codes”

the Codes of Good Practice on BEE published in terms of the BBBEE Act and applicable to ArcelorMittal;

"Companies Act"

the Companies Act, 71 of 2008, as amended, including, where applicable the Companies Regulations;

"Contributions"

those amounts to be contributed by ArcelorMittal to the Trust from time to time in accordance with the terms and conditions contained in the Contributions Agreement;

"Contributions Agreement"

the agreement entered into between ArcelorMittal and the Trustees, dated 30 July 2015, regulating ArcelorMittal's Contributions to the Trust from time to time;

"CSDP"

a Central Securities Depository Participant, accepted as a participant in terms of the Financial Markets Act, appointed by a holder of securities for the purposes of, and in regard to Dematerialisation;

"Custody Agreement"

the custody agreement between a person and a CSDP or Broker regulating their relationship in respect of Dematerialised Shares held in ArcelorMittal's Uncertificated Securities Register administered by the CSDP or Broker on behalf of that person;

"Dematerialisation"

the process whereby Certificated Shares are incorporated into the Strate system and are no longer evidenced by physical Documents of Title, but converted into electronic format as Dematerialised Shares and recorded in ArcelorMittal’s Uncertificated Securities Register;

"Dematerialised Share"

an ArcelorMittal Share that has been Dematerialised or has been issued in Dematerialised form, and recorded in ArcelorMittal’s Uncertificated Securities Register;

"Dematerialised Shareholder"

an ArcelorMittal Shareholder who holds Dematerialised Shares;

“Disposal”

the disposal of 21 103 219 ArcelorMittal Shares by Vicva to the Trust at a total purchase price of R1 854 128 821, amounting to a price of R87,86 per share, in accordance with the terms and conditions contained in the Sale Agreement;

"Documents of Title"

share certificates, certified transfer deeds, balance receipts and/or any other form of acceptable document of title acceptable to ArcelorMittal in respect of ArcelorMittal Shares;

"Employment Termination Date"

the date on which the cause of a Fault Termination or No Fault Termination arises or, if the Board so determines, the date on which a Beneficiary ceases to be actually employed by any member of the ArcelorMittal Group as a result of such Fault Termination or No Fault Termination, in which event it shall be such date;

"Expiry Date"

means 30 September 2020 or such other date notified in writing by ArcelorMittal to the Trustees;

"Fault Termination"

the termination of employment of a Beneficiary with any member of the ArcelorMittal Group prior to the expiry of the Incentive Period for any reason whatsoever other than a No Fault Termination, and shall include dismissal, abscondment or resignation of the Beneficiary, such other grounds notified in writing by ArcelorMittal to the Trustees from time to time;

"Financial Markets Act"

Financial Markets Act, 19 of 2012, as amended;

"First Allocation Date"

Thursday, 1 October 2015, or such other date notified in writing by ArcelorMittal to the Trustees;

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"General Meeting"

the general meeting of ArcelorMittal Shareholders to be held at The Hyatt Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg at 09h00 on Friday, 18 September 2015, which meeting is convened in terms of the notice of general meeting attached to this Circular (or any adjourned or postponed meeting);

"Incentive Period"

in respect of each Trust Unit, a period that commences on the Allocation Date and expires on the Expiry Date;

"Income Right"

in respect of each Allocated Trust Unit a right of the Beneficiary to the Net Income, on the basis that each Allocated Trust Unit shall bear its proportionate share of the Net Income, and which shall be an amount determined in accordance with the provisions of the Trust Deed;

“Initial Contribution”

the initial contribution of R1 854 128 821 to be made by ArcelorMittal to the Trust in accordance with the terms and conditions of the Contributions Agreement to fund the purchase price of the Sale Shares;

"JSE"

JSE Limited (Registration number 2005/022939/06), a public company duly incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act;

"Last Practicable Date"

Friday, 7 August 2015, being the last practicable date prior to the finalisation of this Circular;

"Liabilities"

the costs of the Trust, tax and all other current and non-current liabilities of the Trust;

"Listings Requirements"

the Listings Requirements of the JSE;

“LTIP”

the ArcelorMittal South Africa Long Term Incentive Plan 2012;

“LTIP Conditional Award”

a conditional award of ArcelorMittal Shares granted to an LTIP Participant under the LTIP;

“LTIP Employer Company”

ArcelorMittal, a subsidiary thereof or of a selected associated organisation;

“LTIP Participant”

an employee of and LTIP Employer Company, to whom an LTIP Conditional Award has been made under the LTIP and who has accepted same;

"Market Value"

the prevailing market price of a Trust Share;

"Net Capital Proceeds"

the actual proceeds received by the Trust in respect of the disposal of an ArcelorMittal Related Share, less any Liabilities;

"Net Cash Reserves"

the cash reserves (being the aggregate amount of income and/or cash received by the Trust which is not vested in the Beneficiaries in accordance with the Trust Deed, but which is capitalised and held by the Trust on capital account), available in the Trust after settling all of the Liabilities;

"Net Income"

all the income actually received by or accrued to the Trust, other than the Net Capital Proceeds, but which shall include all dividends, including script dividends, in respect of the Trust Shares, less any Liabilities;

"No Fault Termination"

the termination of employment of a Beneficiary with the ArcelorMittal Group prior to the expiry of the Incentive Period, for any of the followings reasons: −

the death of the Beneficiary;



the retirement of a Beneficiary (at a retirement age which accords with the ArcelorMittal Group’s internal policies);



the retrenchment of a Beneficiary;



permanent disability or incapacity;



a Beneficiary becoming employed by a new employer which is not a member of the

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ArcelorMittal Group, to whom a business of ArcelorMittal has been transferred; −

the secondment of a Beneficiary, at the written request of ArcelorMittal, to a company outside the ArcelorMittal Group; and



where a Beneficiary is promoted to an employment band which does not fall within the range specified in paragraph 2.1.3 of this Circular;

"Qualifying Employee"

the persons who comply with the requirements set out in paragraph 2.1 of this Circular on the Allocation Date;

"Register"

ArcelorMittal’s securities register, including each Uncertificated Securities Register;

“Sale Agreement”

the sale of shares agreement entered into between Vicva, ArcelorMittal and the Trust, dated 30 July 2015, on the terms and conditions of which the Disposal is to be effected;

“Sale Shares”

the 21 103 219 ArcelorMittal Shares held as treasury shares by the Vicva, to be disposed of to the Trust in terms of the Sale Agreement;

“Scheme”

the Ikageng Broad-Based Employee Share Scheme, constituted and regulated by the Trust Deed;

"SENS"

the Stock Exchange News Service of the JSE;

"South Africa"

the Republic of South Africa;

“Sponsor”

JP Morgan Equities South Africa Proprietary Limited (Registration number 1995/011815/07), a private company incorporated in accordance with the laws of the RSA, with a registered office of 1 Fricker Road, Corner Hurlingham Road, Illovo, Sandton, 2196, being the sponsor of ArcelorMittal;

"Strate"

the settlement and clearing system used by the JSE, managed by Strate Proprietary Limited (Registration number 1998/022242/07), a private company duly incorporated in accordance with the laws of South Africa;

"Subsidiary"

a subsidiary as defined in the Companies Act;

"Transfer Secretaries" or "Computershare"

Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company incorporated in accordance with the laws of the RSA, with a registered address of Ground Floor, 70 Marshall Street, Johannesburg, 2001, being the transfer secretaries of ArcelorMittal;

"Trust"

The Ikageng Broad-Based Employee Share Trust as constituted in terms of the Trust Deed;

"Trust Deed"

the trust deed of the Trust as amended from time to time in accordance with its terms;

"Trustees"

the trustees from time to time of the Trust, all holding office in terms of the Trust Deed;

"Trust Shares"

the issued ArcelorMittal Shares which the Trust acquires and holds in accordance with the provisions of the Trust Deed;

"Trust Units"

the notional units created by the Trustees in terms of the Trust Deed, used exclusively as a mechanism to establish the respective Capital Rights and Income Rights in respect of each Allocated Trust Unit, of the Beneficiaries inter se;

"Uncertificated Securities Register:

the record of Dematerialised Shares administered and maintained by a CSDP and which forms part of the Register; and

“Vicva”

Vicva Investments and Trading Nine Proprietary Limited (Registration number 2000/011081/07) a private company duly registered and incorporated in accordance with the laws of South Africa and a wholly-owned Subsidiary of the Company.

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ARCELORMITTAL SOUTH AFRICA LIMITED Incorporated in the Republic of South Africa (Registration number 1989/00264/06) Share code: ACL ISIN: ZAE000134961 ("ArcelorMittal" or “the Company”)

Directors

Executive

Non-executive

PS O’Flaherty (Chief Executive Officer)

PM Makwana * (Chairman)

D Subramanian (Chief Financial Officer)

DCG Murray * NP Mnxasana * JRD Modise * LP Mondi DK Chugh RK Kothari M Vereecke *Independent

Circular to ArcelorMittal Shareholders Part 1: Introduction

The purpose of this Circular is to provide ArcelorMittal Shareholders with information regarding the following matters: 1.

the Scheme, and more particularly: a.

the disposal of the Sale Shares for cash to the Trust; and

b.

the granting of financial assistance by ArcelorMittal,

each pursuant to the Scheme proposed to be adopted by ArcelorMittal with the purpose of facilitating BEE ownership and creating meaningful wealth for qualifying employees in order to ensure their long-term dedication and the retention of skills, whilst enhancing transformation of the ArcelorMittal group; and 2.

the granting of financial assistance by ArcelorMittal pursuant to the Long Term Incentive Plan 2012,

and to give notice of the General Meeting in order to consider and, if deemed fit, to pass the relevant resolutions. The notice convening the General Meeting is attached to and forms part of this Circular. Further information pertaining to 1 and 2 above are set out in Part 2 and Part 3 of this Circular, respectively.

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Part 2: The scheme, the disposal and related financial assistance

1.

Introduction 1.1.

The Board proposes to introduce the Scheme, which is a broad-based employee share scheme, with the objective of facilitating BEE ownership in the ArcelorMittal Group in compliance with the Codes. In order to demonstrate the commitment of ArcelorMittal to BEE and contribute towards the social upliftment of black people, it is intended that a minimum of 60% of the economic benefits attached to the ArcelorMittal shares that will be the subject of the Scheme must accrue to black persons (as such term is understood in the BBBEE Act, as read with the Codes) who participate in the Scheme. In the first allocation, such black beneficiaries will also be allocated more Trust Units than the non-black beneficiaries. It is furthermore intended that the Trust would adhere to the BEE requirements applicable to the Trust and/or ArcelorMittal which are of general or substantially general application, whether or not they have the force of law, including the requirements set out in the BBBEE Act and the Codes.

1.2.

The purpose of the Scheme is also to create meaningful wealth for approximately 9 000 ArcelorMittal Group employees. The Board believes that this will lead to the long-term dedication of employees and retention of skills, thereby contributing to the success of the ArcelorMittal Group.

1.3.

The purpose of the broad-based employee share scheme is also to enhance the transformation of ArcelorMittal Group.

1.4.

The lifespan of the Scheme will be five years from its implementation, which is envisaged to occur on 1 October 2015.

1.5.

The Scheme is proposed to be implemented through the mechanism of the Trust, which will hold the ArcelorMittal shares that are the subject of the Scheme. The shares will at the outset of the Scheme constitute 4,7% of the issued share capital of the Company and will be sourced from treasury shares held by Vicva, at the cost of the Company. For such purposes, the Company will make a monetary contribution to the Trust. It is also envisaged that the Company may make future monetary contributions to the Trust to fund the cost of operating the Trust, to make contributions to enable the Trust to make payments to deceased Beneficiaries’ estates as compensation for the cancellation of their Allocated Trust Units and/or to cover ad hoc voluntary distributions to the qualifying employees who become beneficiaries of the Trust.

1.6.

Permanent employees of the ArcelorMittal Group who fall within ArceclorMittal’s middle management and lower employment grades (who would not qualify for participation in the Company’s long term incentive plan for senior management), would qualify to participate in the Scheme, provided they are “new entrants” as contemplated in the Codes and are not serving their notice period. As beneficiaries of the Trust, these qualifying employees will be entitled during the lifespan of the Scheme (or from the time they become beneficiaries, in the case of future allocations) to share proportionately in the net income derived from the ArcelorMittal Shares that will be the subject of the Scheme. Furthermore, at the end of the Scheme (when the capital entitlement vests), they will have the option of having the ArcelorMittal Related Shares that are notionally linked to their Allocated Trust Units transferred to them, thereby acquiring a direct interest in the equity of ArcelorMittal, or to receive the net proceeds derived from the sale of such shares.

1.7.

Each Qualifying Employee who is a black person and who does not reject the allocation made on the First Allocation Date, will qualify for 2 250 Trust Units, whilst each Qualifying Employee who is not a black person and who does not reject the allocation made on the First Allocation Date, will qualify for 1 950 Trust Units. Allocations are made irrespective of the employment grading of Qualifying Employees. It is accordingly envisaged that approximately 18 900 000 out of the total of the 21 103 219 initial Trust Shares will be linked to the first allocation of Trust Units. The balance of the Trust Shares will not be linked until future allocations of Trust Units are made, for example in the case of new appointments or when additional Trust Units need to be allocated to Beneficiaries who are black persons so as to ensure that the 60% BEE requirement for the Scheme is adhered to.

1.8.

The Trust will not be controlled by the Company, so that the JSE will permit the voting rights exercisable at general meetings of ArcelorMittal Shareholders on the ArcelorMittal Shares held by the Trust would be taken into account during the lifespan of the Scheme in respect of all resolutions taken at such general meetings. The Trust Deed accordingly makes provision for only one, out of the six, Trustees that are required to be in office, to be appointed at the behest of the Company. Three of the remaining five must be elected from the ranks of the Beneficiaries (after the Beneficiaries have ran the nomination and appointment process prescribed by the Trust Deed) and the other two must then be elected by such three Beneficiary appointed trustees and the trustee appointed by the Company, from a list of candidates who are independent of the ArcelorMittal

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Group and the Trust, provided by ArcelorMittal. A first Trustee, Mr Monungwa Isak Mtolo, was appointed by the Company as an interim arrangement for purposes of setting up the Trust and making the first allocations, seeing that there must be Beneficiaries before the remainder of the Trustees can be appointed. During such interim period, the first Trustee will not be entitled to exercise any voting rights in respect of the ArcelorMittal Shares that will be held by the Trust.

2.

Key features of the scheme The key features of the Scheme are as follows: 2.1.

the Board must from time to time identify the Qualifying Employees and, in doing so, the Board must take into account the following criteria: 2.1.1.

a Qualifying Employee must be a permanent employee of the ArcelorMittal Group, having entered into an ArcelorMittal employee contract. Fixed-term contractors, independent contractors, service contractors, temporary contract holders and expatriates do not qualify for participation in the Scheme;

2.1.2.

a Qualifying Employee must be a “new entrant” as contemplated in the Codes;

2.1.3.

a Qualifying Employee must fall within ArcelorMittal’s employment grades "E" to "L", which are the employment grades for middle management and below;

2.1.4.

a Qualifying Employee must not be serving his notice period; and

2.1.5.

a Qualifying Employee may not participate in any other incentive scheme of the ArcelorMittal Group;

2.2.

at the commencement of the Scheme, Qualifying Employees are allocated Trust Units, each of which is notionally linked to one ArcelorMittal Related Share. The number of Allocated Trust Units therefore indicates the number of ArcelorMittal Related Shares that could vest in a Qualifying Employee (or in respect of which the Beneficiary would receive a distribution of Net Capital Proceeds should the Beneficiary elect that the ArcelorMittal Related Shares should be disposed of by the Trust) at the end of the Incentive Period, subject to the terms of the Trust Deed. There are no performance targets for vesting. The Beneficiaries have no right in or to the assets of the Trust (including the Trust Shares) until vesting;

2.3.

during the Incentive Period, the Net Income accruing to the Trust from time to time in respect of each of the Trust Units, will be distributed among all the Beneficiaries in accordance with their Income Rights, which are proportionate to the number of Allocated Units that each Beneficiary holds;

2.4.

the amount of the Beneficiary Cash Claim, if any, payable to a Beneficiary must be awarded to, vest in and be distributed to the Beneficiary on the Expiry Date in accordance with the provisions of the Trust Deed;

2.5.

Qualifying Employees are not required to pay any consideration for their allocated Trust Units or the ArcelorMittal Related Shares;

2.6.

the Trust, as the registered holder and owner of the Trust Shares, is entitled to vote the Trust Shares at all meetings of ArcelorMittal Shareholders and a decision as to how to vote the Trust Shares must be determined by the Trustees prior to the relevant meeting of ArcelorMittal's Shareholders;

2.7.

termination of employment for reasons of Fault Termination prior to the end of the Incentive Period will result in the cancellation of the Qualifying Employee’s participation in the Scheme through forfeiture of the Beneficiary's Trust Units as from the Employment Termination Date. Consequently, the Beneficiary will cease to be entitled to a proportionate share of the future distributions of the Net Income and cease to have a Capital Right and any right to the Beneficiary Cash Claim;

2.8.

termination of employment for reasons of No Fault Termination prior to the end of the Incentive Period will result in a proportionate participation in the Scheme, in that the Beneficiary will be entitled only to the portion of the Allocated Trust Units calculated by reference to and in the same proportion that the number of days of the Incentive Period up to the Employment Termination Date bears to the total number of days in the Incentive Period. The remainder of the Allocated Trust Units will immediately be forfeited. Except in the case of death (as dealt with in paragraph 4.3), in respect of the Trust Units that the Beneficiary will be entitled to retain, the ArcelorMittal Related Shares will only be disposed of by the Trustees upon or after the expiry of the Incentive Period, at which time the Net Capital Proceeds arising from the disposal will vest in such Beneficiary;

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3.

2.9.

during the Incentive Period, a Beneficiary will not be entitled to sell, transfer or otherwise dispose of or encumber his Trust Units and/or his the Capital Right or Income right, or any other right in terms of the Trust Deed, other than by way of the forfeiture or cancellation thereof in accordance with the terms of the Trust Deed;

2.10.

if the Trustees become obliged and/or forced as a matter of law or by reason of contractual obligations to dispose of all of the Trust Shares to any third party, the Trustees must immediately allocate all of the Trust Units which have not been allocated to Qualifying Employees or were forfeited by Beneficiaries as a result of No Fault Terminations and/or Fault Terminations, to those Beneficiaries who meet the criteria to qualify for participation in the Scheme in proportion to their Allocated Trust Units immediately prior to such forced disposal. The Trustees must thereafter dispose of the Trust Shares to the third party and vest in and distribute the Net Capital Proceeds to the Beneficiaries;

2.11.

The Scheme will terminate on the Expiry Date but may, however, at any time be terminated sooner by the Trustees by unanimous resolution, subject to ArcelorMittal’s prior written approval, or by ArcelorMittal on written notice to the Trustees, subject to compliance with any applicable requirements of the JSE. Where this Scheme is so terminated prior to the Expiry Date, all of the Trust Units which have not been allocated to Qualifying Employees or were forfeited by Beneficiaries as a result of No Fault Terminations and/or Fault Terminations, must be allocated by the Trustees to the Beneficiaries at the time in proportion to their Allocated Trust Units and in accordance with the principle that 60% of the economic benefits must accrue to Beneficiaries who are black persons. Thereafter, the Beneficiaries will have the option of having the ArcelorMittal Related Shares that are notionally linked to their Allocated Trust Units transferred to them, thereby acquiring a direct interest in the equity of ArcelorMittal, or to receive the net proceeds derived from the sale of such shares.

The disposal 3.1.

Vicva has agreed to sell the Sale Shares to the Trust with effect from the date after the last of the conditions precedent to the Disposal is fulfilled, as may be agreed between the parties to the Sale Agreement in writing.

3.2.

The Disposal will not take place at the market value per ArcelorMittal share at the time the Sale Agreement is implemented, but rather at a consideration of R87,86 per ArcelorMittal Share. The reason for the sale at a premium to market value is that Vicva acquired the Sale Shares at R87,86 per share during 2009 using a loan from ArcelorMittal and is indebted to settle this loan. The total purchase price is accordingly R1 854 128 821. The Initial Contribution to be made by ArcelorMittal to the Trust must be applied in payment of the purchase price of the Sale Shares to Vicva. Vicva is obliged to apply the money as settlement of Vicva’s indebtedness to ArcelorMittal and pursuant thereto ArcelorMittal will be in a cash neutral position despite having made the Initial Contribution,

3.3.

As the Sale Shares are held by Vicva as treasury shares, the disposal thereof to the Trust will be required to comply with the provisions of the Listings Requirements governing a specific issue of shares for cash.

3.4.

This Disposal is subject to the fulfilment of the following outstanding conditions precedent by no later than 1 October 2015 or such later date as the parties to the Sale Agreement may agree in writing, namely that -

3.5.

4.

3.4.1.

ArcelorMittal Shareholders have passed all such resolutions as may be required to approve and implement the Disposal, as required in terms of the Companies Act and/or the JSE Listings Requirements; and

3.4.2.

the Contributions Agreement has become unconditional in accordance with its terms, save for any condition precedent thereto requiring the Sale Agreement to become unconditional.

The Trust is not a public shareholder as contemplated in the JSE Listings Requirements. However, following the Disposal, at least 20% of the issued ArcelorMittal Shares will continue to be held by the public.

Financial assistance relating to the scheme 4.1.

ArcelorMittal has undertaken to contribute the Initial Contribution to the Trustees once the last of the conditions precedent to the Contributions Agreement is met. The Trustees will be obliged to utilise and apply the Initial Contribution to pay the purchase price owing to Vicva pursuant to the Disposal. The Trustees will have no obligation to repay any portion of the Initial Contribution to ArcelorMittal. The money has to be applied by the Trustees to acquire the Sale Shares.

4.2.

Vivca will be required to use the purchase price to settle its indebtedness to ArcelorMittal on account of money advanced by ArcelorMittal to Vicva during 2009 and which Vicva had used at the time to acquire ArcelorMittal Shares as treasury shares.

10

5.

4.3.

ArcelorMittal will also be obliged to make a Contribution to the Trust in the event of a No Fault Termination as a result of death prior to the end of the Incentive Period. In such instance, the Beneficiary will be entitled only to the portion of the Allocated Trust Units calculated by reference to and in the same proportion that the number of days of the Incentive Period up to the Employment Termination Date bears to the total number of days in the Incentive Period. The Trustees will determine the market value of the ArcelorMittal Related Shares notionally linked to the aforementioned portion of the Allocated Trust Units and ArcelorMittal will be obliged to make a Contribution to the Trust in such amount, which money the Trustees will be required to make a payment to the deceased Beneficiary’s estate as compensation for the cancellation of such portion of Allocated Trust Units.

4.4.

ArcelorMittal is also liable to pay all reasonable costs, expenses and tax of the Trust, including the fees payable to its auditors and the amounts due and payable in accordance with the agreement whereby an administrator is to be appointed to administer the Trust (including the administrator’s fees). It has also agreed to pay any other administration costs which have been approved by ArcelorMittal in writing in terms of the Trust Deed. ArcelorMittal shall also provide to or procure for the Trust, all secretarial, accounting, audit, administrative and legal services at no charge.

4.5.

ArcelorMittal is entitled to make Additional Contributions to the Trust from time to time, in its sole and absolute discretion.

4.6.

The implementation of the Contributions Agreement (and consequently the making of the Initial Contribution and other Contributions) is subject to the fulfilment of the following outstanding conditions precedent by no later than 1 October 2015 or such later date as the parties to the Sale Agreement may agree in writing, namely that 4.6.1.

ArcelorMittal Shareholders have passed all such resolutions as may be required to approve and implement the transactions contemplated in the Contributions Agreement, including any special resolutions required in terms of the Companies Act; and

4.6.2.

the Sale Agreement has become unconditional in accordance with its terms, save for any condition precedent thereto requiring the Contributions Agreement to become unconditional.

4.7.

At the General Meeting, the approval of ArcelorMittal Shareholders by special resolution will be sought to the making by ArcelorMittal of the Contributions, to the extent that the making of the Contributions by ArcelorMittal may constitute financial assistance granted by ArcelorMittal to the Trust and/or Qualifying Employees.

4.8.

There may also be financial assistance provided by ArcelorMittal to the Beneficiaries through their participation in and benefitting from the Scheme and accordingly the approval of ArcelorMittal Shareholders by special resolution will also be sought to approve same, to the extent required by the Act.

Pro forma financial information 5.1.

Annexure 3 of this Circular contains the pro forma financial effects which illustrate the impact of the Scheme on the earnings per share (“EPS”), headline earnings per share (“HEPS”), net asset value per share (“NAV”) and tangible net asset value (“TNAV”) per share of ArcelorMittal for the twelve months ended 31 December 2014. The Independent Reporting Accountants’ report on the pro forma financial information of ArcelorMittal is contained in Annexure 4 of this Circular.

5.2.

The pro forma financial information is presented in accordance with the provisions of the Listings Requirements and the Guide on Pro Forma Financial information issued by the South African Institute of Chartered Accountants.

5.3.

These pro forma financial effects are the responsibility of the Directors.

5.4.

The pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information of ArcelorMittal has been presented and in terms of ArcelorMittal’s accounting policies for the financial year ended 31 December 2014. The pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of ArcelorMittal’s financial position, changes in equity or results of operations post implementation of the Scheme.

5.5.

It has been assumed for purposes of pro forma financial effects that the Scheme took place with effect from 1 January 2014 for the statement of comprehensive income purposes and on 31 December 2014 for the statement of financial position purposes.

11

Pro forma per share information for the year ended 31 December 2014 The pro forma financial effects of the Scheme are as follows: Column

A

B

Before the scheme

Pro forma after the

% Change

Scheme Rm

Rm

Loss per share (cents)

(39)

(54)

-38%

Diluted loss per share (cents)

(39)

(54)

-38%

Headline loss per share (cents)

(57)

(71)

-25%

Diluted headline loss per share (cents)

(57)

(71)

-25%

Net asset value (NAV) per share (cents)

5 165

5 163

0%

Tangible net asset value (TNAV) per share (cents)

5 131

5 129

0%

Total number of shares in issue

401 201 877

401 201 877

0%

Weighted average number of shares in issue

401 201 877

401 201 877

0%

Diluted weighted average number of shares in issue

401 201 877

401 201 877

0%

NOTES 1

Column A has been derived without adjustment from ArcelorMittal’s audited consolidated financial statements for the year ended 31 December 2014.

2

Column B illustrates the pro forma financial effects after the Scheme which take into account the following -

Estimated IFRS 2 charge of R72 million calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per share at inception of the Scheme is assumed at R17.

-

Estimated once-off transactions costs of R4 million.

-

Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of R4 million as well as the securities tax payable by a group entity of R5 million calculated at 0.25% of R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.

3

The weighted average number of shares in issue remained the same as the Trust will be consolidated and the Sale Shares treated for accounting purposes as treasury shares until vesting.

12

Part 3: Financial assistance relating to the LTIP

1.

Shareholders approved the LTIP at a the Company’s annual general meeting held in May 2012 by ordinary resolution passed by a 75% majority of the votes cast in favour of the resolution by shareholders present or represented by proxy at the meeting. The LTIP is a share incentive scheme for senior management and specialist grades, including executive directors and prescribed officers of LTIP Employer Companies.

2.

The first grants of LTIP Conditional Awards, which were made during 2012, are due to vest later in 2015, provided that the applicable vesting conditions are met. Shortly after vesting, the relevant LTIP Employer Companies will be required to deliver ArcelorMittal Shares to the LTIP Participants in their employ. In terms of the rules of the LTIP, the LTIP Employer Companies must, on instruction of the Directors procure the funds for the purchase of ArcelorMittal Shares on the market and then instruct any third party to acquire and deliver the ArcelorMittal Shares to the relevant LTIP Participants in their employ. The LTIP Employer Companies would accordingly bear the liability for the cost of the acquisition of ArcelorMittal Shares that are due to be delivered to the LTIP Participants in their employ upon vesting of the relevant LTIP Conditional Awards. LTIP Participants are not required to pay any monetary consideration for the LTIP Conditional Awards made to them, nor for the ArcelorMittal Shares they are due to receive upon vesting.

3.

In the absence of new case law on the relevant provisions of the Companies Act, which came into force during 2011, the Board has decided to err on the side of caution and to proceed on the basis that financial assistance under sections 44 and/or 45 of the Companies Act may be provided in the implementation of the LTIP, and in particular, through the funding by the LTIP Employer Companies of the acquisition cost of ArcelorMittal Shares for delivery to LTIP Participants in whom LTIP Conditional Awards have vested.

4.

One of the requirements of the aforementioned sections is that, unless the exemption for employee share schemes under the Companies Act has application, the board of a company may not authorise financial assistance under such sections without the approval of the shareholders of the company by special resolution (adopted within the previous two years). Unfortunately, because of the narrow wording of the exemption for employee share schemes, it does not appear to apply to share schemes whereby participation is offered by means of the transfer of the issued shares in the company, such as the LTIP.

5.

At the General Meeting, the approval of ArcelorMittal Shareholders by special resolution will accordingly be sought, to the extent required, to the provision of financial assistance by ArcelorMittal under the LTIP, including through the funding of the acquisition cost of ArcelorMittal Shares for delivery to LTIP Participants in whom LTIP Conditional Awards have vested.

13

Part 4: General

1.

The Company’s capital structure The Company’s capital structure before and after the Disposal is set out below:

Before and after the Disposal

R’m

Share capital

Authorised share capital 1 200 000 000 ordinary shares of no par value

-

Issued share capital 445 752 132 ordinary shares of no par value

37

Total stated capital

37

44 550 255 ArcelorMittal Shares are held in treasury as at the Last Practicable Date. Following implementation of the Disposal, 23 447 036 ArcelorMittal Shares will be held in treasury. No issues of ArcelorMittal Shares were made during the three years preceding the Last Practicable Date.

2.

Information on the Directors and Managers 2.1.

Information on directors and managers The full name, business address, function in the ArcelorMittal Group and principal activities performed by them of each of the directors and senior managers of ArcelorMittal are set out in Annexure 1 to this Circular. ArcelorMittal has no major subsidiaries.

2.2.

Directors beneficial interests in ArcelorMittal Shares The interests of the Directors in ArcelorMittal Shares as at the Last Practicable Date, including former directors who resigned during the last 18 months, are set out in the table below: Director

Beneficial Shareholding Direct

JRD Modise DCG Murray Total

Total Shareholdings

Indirect

Number

%

5 025

-

5 025

0,001

-

5 5571

5 557

0,001

5 025

5 557

10 582

0,002

1. DCG Murray indirectly acquired 4 000 shares between the Company’s last financial year end and the Last Practicable Date.

2.3.

Directors’ interests in transactions The Directors, including Directors who have resigned in the last 18 months, have had no direct or indirect interest in any transaction that the Company effected during the current or immediately preceding year, or in an earlier financial year which remains in any respect outstanding or unperformed.

14

2.4.

Remuneration The remuneration receivable by the Directors will not be varied in consequence of the Disposal.

3.

Expenses 3.1.

There have been no preliminary expenses incurred by the Company in the three years immediately preceding the date of this Circular.

3.2.

The expenses, excluding VAT, relating to the Disposal, are detailed below and relate, inter alia, to: Payable to

4.

R

Edward Nathan Sonnenbergs Inc.

Legal and Tax Advisers

2 000 000

Deloitte & Touche

Independent Reporting Accountants

180 000

B1SA and Nkonki

BEE Rating Advisers and Independent BEE Advisers

126 700

Vesco Reprographics

Printing and distribution

306 000

Bastion Graphics

SENS/newspaper publishing

235 000

JSE Limited

JSE documentation inspection fees

13 358

Other

640 000

Total

3 501 058

Market value of ArcelorMittal shares A table of the aggregate volumes and values traded and the highest and lowest prices traded in ArcelorMittal Shares for each month over the twelve months prior to the date of issue of this Circular, and for each day over the 30 days preceding the Last Practicable Date prior to the date of issue of the circular, is attached hereto as Annexure 2.

5.

Business of ArcelorMittal and its subsidiaries 5.1.

ArcelorMittal, headquartered in Vanderbijlpark in South Africa’s Gauteng Province, is the largest steel producer on the African continent, with a production capacity of 6.5 million tonnes of liquid steel (long and flat products) per annum. It has in excess of 9 000 employees. In 2014 it yielded revenue of R35 billion.

5.2.

The Company has a depth of technical and managerial expertise carefully nurtured since being founded in 1928, a reputation for reliability and a sharply defined business focus, which has forged the organisation into a modern, highly competitive supplier of steel products to the domestic and global markets.

5.3.

This has been achieved through on-going alignment with international best practices and a comprehensive understanding of the steel business environment, ensuring the Company’s continued global competitiveness and participation in international markets.

5.4.

ArcelorMittal's global standing is further underpinned as part of the world’s largest steel producer, the ArcelorMittal group. The Company is the world's number one steel company, with 232 000 employees worldwide.

5.5.

ArcelorMittal is the leader in all major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

15

5.6.

6.

Through this association ArcelorMittal has access to world-class research and development, best practice processes, aggressive procurement contracts and international market leverage to ensure the Company remains at the cutting edge of the international steel industry.

Opinion and recommendation The Directors have considered the rules of the Trust Deed and are of the opinion that the adoption of the Scheme is in the best interest of the Company and ArcelorMittal's Shareholders. Accordingly, the Board recommends that Shareholders vote in favour of the resolutions required to effect the adoption and implementation of the Scheme.

7.

Directors’ responsibility statement The Directors collectively and individually, accept full responsibility for the accuracy of the information contained in the Circular and certify that, to the best of their knowledge and belief there are no facts that have been omitted which would likely affect the importance of such information or make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the Circular contains all information required by the Listings Requirements.

8.

9.

Experts’ consent 8.1.

The Sponsor, Legal Advisers, Independent Reporting Accountants and the Transfer Secretaries have consented in writing to act in the capacities stated and to their names being stated in this Circular and have not, prior to the Last Practicable Date, withdrawn their consents prior to the publication of this Circular.

8.2.

The Independent Reporting Accountants have given and have not withdrawn their consent to the issue of this Circular, with their reports in the form and context in which they are included.

Documents available for inspection 9.1.

10.

The following documents, or copies thereof, will be available for inspection at the offices of ArcelorMittal and the Sponsor, respectively, which addresses are set out in the “Corporate Information” section of the Circular, during normal business hours from Wednesday, 19 August 2015 up to and including, Friday,18 September 2015: 9.1.1.

the Memorandum of Incorporation of the Company and its Subsidiaries;

9.1.2.

the Trust Deed;

9.1.3.

the Sale Agreement;

9.1.4.

the Contributions Agreement;

9.1.5.

the Reporting Accountants' Report, dated 12 August 2015;

9.1.6.

the audited annual financial statements of the Company for the financial years ended 31 December 2012, 31 December 2013 and 31 December 2014;

9.1.7.

a summary of the directors' service contracts entered into during the last three years;

9.1.8.

the written consent letters referred to in paragraph 8 above; and

9.1.9.

a signed copy of this Circular.

General meeting 10.1.

A General Meeting of ArcelorMittal Shareholders will be held at 09h00 on Friday, 18 September 2015 at The Hyatt Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg, in order to consider and approve the resolutions set out in the notice of General Meeting included in this Circular.

10.2.

Shareholders are referred to page 1 of this Circular, which sets out the actions required of them in respect of the matters dealt with in this Circular.

16

Signed on 17 August 2015 at Vanderbijlpark by P S O’Flaherty for and on behalf of all the other Directors of ArcelorMittal Board, in terms of Powers of Attorney granted to him by such directors.

PS O’Flaherty

Chief Executive Officer ArcelorMittal South Africa Limited

17 August 2015 Vanderbijlpark

17

Annexure 1 Information on Directors and Management The table below sets out information pertaining to the current directors and company secretary of ArcelorMittal:

ArcelorMittal South Africa Limited Name and age

Paul Sean O'Flaherty (52)

Nationality

South African

Business address

Executive Corporate ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Chief Executive Officer

Principal activities

Chief Executive Officer

Name and age

Dean Subramanian (42)

Nationality

South African

Business address

Executive Corporate ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Chief Financial Officer

Principal activities

Chief Financial Officer

Name and age

Paul Mpho Makwana (45)

Nationality

South African

Business address

Corporate Office ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Chairman Independent Non-Executive Director

Principal activities

Chairman

Name and age

David Christopher Murray (70)

Nationality

South African

Business address

Corporate Office ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Independent Non-Executive Director

Principal activities

Chairman-Audit & Risk Committee Board Member

18

Name and age

Nomavuso Patience Mnxasana (58)

Nationality

South African

Business address

Corporate Office ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Independent Non-Executive Director

Principal activities

Board Member

Name and age

Jacob Modise (48)

Nationality

South African

Business address

Corporate Office ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function Principal activities

Independent Non-Executive Director Chairman-Remuneration Social & Ethics Committee Board Member

Name and age

Lumkile Mondi (53)

Nationality

South African

Business address

Corporate Office ArcelorMittal DelfosBoulevard Vanderbijlpark, 1900 South Africa

Position/function

Non-Executive Director

Principal activities

Chairman-Share Trust Committee Board Member

Name and age

Davinder Chugh (59)

Nationality

British

Business address

London United Kingdom ArcelorMittal 7th Floor Berkeley Square House Berkeley Square London W1J 6DA United Kingdom

Position/function

Non-Executive Director

Principal activities

Member of Group Management Board, Chief Executive Officer for Africa and The Commonwealth of Independent States (CIS)

19

Name and age

Marc Vereecke (56)

Nationality

Belgian

Business address

Boulevard d’Avranches 24-26 L-1160 Luxembourg G.D. of Luxembourg

Position/function

Non-Executive Director

Principal activities

Chief Operating Officer of ArcelorMittal Africa and CIS

Name and age

Ramesh Kothari (42)

Nationality

Indian

Business address

Boulevard d’Avranches 24-26 L-1160 Luxembourg G.D. of Luxembourg

Position/function

Non-Executive Director

Principal activities

Chief Financial Officer of ArcelorMittal Africa and CIS

Name and age

Nomonde Bam (31)

Nationality

South African

Business address

Main building: Corporate ArcelorMittal Delfos Boulevard Vanderbijlpark, 1900 South Africa

Position/function

Company Secretary

Principal activities

Company Secretary

20

Annexure 2

Price and trading history Monthly trading detail for the 12 months to 31 July 2015

ArcelorMittal South Africa Ltd

Date

31/07/14 31/08/14 30/09/14 31/10/14 30/11/14 31/12/14 31/01/15 28/02/15 31/03/15 30/04/15 31/05/15 30/06/15 31/07/15

Low

High

3010 3466 3550 3256 2720 2235 2074 2280 1862 1831 1549 1161 1022

3850 4200 4225 3900 3448 2885 2631 2699 2648 2184 2131 1645 1600

Volume

9 711 062 15 697 394 16 812 169 11 338 119 10 819 173 15 315 385 12 271 802 6 686 541 9 924 142 11 650 386 8 016 676 7 928 021 18 366 900

Value

329 699 312 608 024 438 664 509 488 413 467 216 335 438 049 388 625 677 286 801 447 171 053 071 223 463 235 232 306 373 145 435 991 116 485 839 252 427 073

Monthly trading detail for the 12 months to 31 July 2015

ArcelorMittal South Africa Ltd

Date

29/06/15 30/06/15 01/07/15 02/07/15 03/07/15 06/07/15 07/07/15 08/07/15 09/07/15 10/07/15 13/07/15 14/07/15 15/07/15 16/07/15 17/07/15 20/07/15 21/07/15 22/07/15 23/07/15 24/07/15 27/07/15 28/07/15 29/07/15 30/07/15 31/07/15 03/08/15 04/08/15 05/08/15 06/08/15 07/08/15

Low

High

1265 1161 1161 1022 1082 1197 1197 1161 1190 1178 1110 1207 1260 1316 1365 1400 1380 1491 1450 1338 1274 1275 1401 1443 1462 1280 1301 1415 1417 1427

1348 1300 1270 1209 1237 1270 1250 1220 1244 1220 1233 1334 1368 1385 1460 1495 1569 1561 1588 1519 1360 1417 1485 1560 1600 1495 1491 1515 1505 1547

Volume

363 388 454 133 658 887 1 094 740 625 638 294 182 399 235 289 054 212 545 487 523 365 704 554 176 554 998 568 188 1 370 537 2 708 431 883 022 402 839 937 365 1 589 571 430 401 1 232 177 413 576 1 833 887 460 224 327 229 268 193 545 344 868 967 931 602

Value

4 704 775 5 662 328 7 810 221 12 057 079 7 361 479 3 606 949 4 863 229 3 471 916 2 556 800 5 867 839 4 248 294 7 028 229 7 447 699 7 736 975 19 437 125 39 052 877 13 486 163 6 154 389 14 339 133 22 832 177 5 684 001 17 035 292 5 945 268 27 399 927 7 004 012 4 605 093 3 816 014 8 121 969 12 841 192 14 103 246

21

Annexure 3 Pro Forma Financial Information Relating to the Scheme

The pro forma financial information is presented in accordance with the provisions of the Listings Requirements of the JSE Limited and the Guide on Pro Forma Financial information issued by the South African Institute of Chartered Accountants. These pro forma financial effects are the responsibility of the Directors.

The pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information of ArcelorMittal South Africa Limited has been presented and in terms of ArcelorMittal South Africa Limited’s accounting policies for the financial year ended 31 December 2014. The pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not give a fair reflection of ArcelorMittal South Africa Limited’s financial position, changes in equity or results of operations post implementation of the Scheme.

It has been assumed for purposes of pro forma financial effects that the Scheme took place with effect from 1 January 2014 for the statement of comprehensive income purposes and on 31 December 2014 for the statement of financial position purposes.

The pro forma financial information as out below should be read in conjunction with the report of the independent reporting accountant which is included as Annexure 4 of this circular.

22

Pro forma statement of comprehensive income for the year ended 31 December 2014 The pro forma statement of comprehensive income presented below was prepared on the assumption that the Scheme was effective on 1 January 2014. A

Column Note

Revenue Raw materials and consumables used Employee costs

B

C

Before the Scheme

Impact of the Scheme

Pro forma after

Rm 34 852

Rm

Rm 34 852 (21 339)

(21 339) 2

(3 764)

the Scheme

(72)

(3 836)

Energy Movement in inventories of finished goods and work-in-progress

(3 466) 292

(3 466) 292

Depreciation

(1 386)

(1 386)

Amortisation of intangible assets Other operating expenses Loss from operations

(24)

(24) 3

(5 466) (301)

(4) (76)

(5 470) (377)

17

17

Finance costs Gain recognised on loss of interest over former associate Income after tax from equity-accounted investments

(605) 80

(605) 80

191

191

Loss before taxation

(618)

Finance and investment income

Income tax credit Loss for the year

4

460 (158)

(76)

(694)

16

476

(60)

(218)

Other comprehensive income Items that may be reclassified subsequently to profit or loss

163

163

Exchange differences on translation of foreign operations

445

445

Losses on available-for-sale investment taken to equity

(29)

(29)

(253)

(253)

Share of other comprehensive income of equityaccounted investments Total comprehensive income/(loss) for the year Loss attributable to: Owners of the company

5

(60)

(55)

(158)

(60)

(218)

5

(60)

(55)

Total comprehensive income/(loss) attributable to: Owners of the company

23

Column

A

B

C

Before the Scheme

Impact of the Scheme

Pro forma after

Rm

Rm

Rm

the Scheme

Loss and headline loss calculations Loss attributable to owners of the company

(158)

(60)

(218)

Adjust for Profit on disposal or scrapping of property,

21

21

(80)

(80)

(10)

(10)

plant and equipment Gain recognised on loss of interest over former associate Profit on disposal of assets of associate Headline loss

(227)

(60)

(287)

401 201 877

-

401 201 877

Loss per share (cents)

(39)

(15)

(54)

Headline loss per share (cents)

(57)

(14)

(71)

401 201 877

-

401 201 877

Diluted loss per share (cents)

(39)

(15)

(54)

Diluted headline loss per share (cents)

(57)

(14)

(71)

Weighted average number of shares in issue

Diluted weighted average number of shares in issue

NOTES

1

General -

Column A has been derived without adjustment from ArcelorMittal South Africa Limited’s audited consolidated financial statements for the year ended 31 December 2014.

2

-

Column B illustrates the impact of the Scheme and elaborated on per note 2 – 5 below.

-

Column C illustrates the pro forma financial effects after the Scheme .

Estimated IFRS 2 charge calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per share at inception of the Scheme is assumed at R17.

3

Estimated once-off transactions costs of R4 million.

4

Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of R4 million as well as the securities tax payable by a group entity of R5 million calculated at 0.25% of R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.

5

The weighted average number of shares in issue remained the same as the Trust will be consolidated and the Sale Shares treated for accounting purposes as treasury shares until vesting.

6

There are no other post balance sheet events requiring an adjustment to the pro-forma financial information.

24

Pro forma statement of financial position as at 31 December 2014 The pro forma statement of financial position presented below was prepared on the assumption that the Scheme was effective 31 December 2014. Column

A Note

B

C

Before the Scheme

Impact of the

Pro forma after the

(Rm)

Scheme (Rm)

Scheme (Rm)

Assets Non-current assets

20 225

20 225

Property, plant and equipment

16 001

16 001

135

135

4 031

4 031

58

58

Intangible assets Equity-accounted investments Other financial assets Current assets

12 801

Inventories

10 684

10 684

1 562

1 562

Taxation

64

64

Other financial assets

37

37

Trade and other receivables

Cash and bank balances

3

Total assets

(4)

12 797

454

(4)

450

33 026

(4)

33 022

20 722

(8)

20 714

Equity and liabilities Equity Stated capital Reserves Retained income

3&4

Non-current liabilities Finance lease obligations

37

37

(1 294)

(1 294)

21 979

(8)

21 971

3 441

-

3 441

256

256

Provisions

1 720

1 720

Deferred income tax liability

1 204

1 204

261

261

Other payables Current liabilities

8 863

Trade payables

6 402

Taxation Other financial liabilities

4

18

4

8 867 6 402

4

22

11

11

1 000

1 000

92

92

Provisions

571

571

Other payables

769

769

Borrowings Finance lease obligations

Total equity and liabilities

33 026

(4)

33 022

25

Column

A Note

B

C

Before the Scheme

Impact of the

Pro forma after the

(Rm)

Scheme (Rm)

Scheme (Rm)

Net asset value (NAV) per share (cents)

5 165

(2)

5 163

Tangible net asset value (TNAV) per share (cents)

5 131

(2)

5 129

401 201 877

-

401 201 877

Total number of shares in issue NOTES

1

General -

Column A has been derived without adjustment from ArcelorMittal South Africa Limited’s audited consolidated financial statements for the year ended 31 December 2014.

2

-

Column B illustrates the impact of the Scheme and elaborated on per note 2 – 5 below.

-

Column C illustrates the pro forma financial effects after the Scheme

Estimated IFRS 2 charge calculated as the fair value of the Sale Shares spread over the vesting period of 5 years. The fair value per share at inception of the Scheme is assumed at R17.

3

Estimated once-off transactions costs of R4 million.

4

Estimated net tax credit calculated at 28% on the estimated IFRS 2 charge of R72 million, transaction costs of R4 million as well as the securities tax payable by a group entity of R5 million calculated at 0.25% of R1 854 million on sale of the shares to the Trust. These tax adjustments are of a non-continuing nature.

5

The weighted average number of shares in issue remained the same as the Trust will be consolidated and the Sale Shares treated for accounting purposes as treasury shares until vesting.

6

There are no other post balance sheet events requiring an adjustment to the pro-forma financial information.

26

Annexure 4

Accountants' Report on the Pro Forma Financial Information

Independent reporting accountants’ report on the pro forma financial information

“The Directors ArcelorMittal South Africa Limited Room N3-3, Delfos Boulevard Vanderbijlpark 1911

Dear Sir(s) / Madam INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION INCLUDED IN A CIRCULAR We have completed our assurance engagement to report on the compilation of pro forma financial information of ArcelorMittal South Africa Limited by the directors. The pro forma financial information, as set out in paragraph 5 and Annexure 3 of the circular (“the circular”), to be dated on or about 19 August 2015, consists of a statement of comprehensive income and a statement of financial position, and related notes. The pro forma financial information has been compiled on the basis of the applicable criteria specified in the JSE Limited Listings Requirements. The pro forma financial information has been compiled by the directors to illustrate the impact of the corporate action or event, described in paragraph 1 of the circular, on the company’s financial position as at 31 December 2014, and the company’s financial performance for the period then ended, as if the corporate action or event had taken place at 1 January 2014, being the commencement date of the financial period for the purposes of the statement of comprehensive income and at 31 December 2014 being the last day of the financial period for the purposes of the statement of financial position. As part of this process, information about the company’s financial position and financial performance has been extracted by the directors from the company’s financial statements for the year ended 31 December 2014, on which an unmodified auditor’s report was issued on 10 March 2015.

Directors’ Responsibility for the Pro Forma Financial Information The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in the JSE Listings Requirements and described in paragraph 5 and Annexure 3 of the circular.

Reporting Accountant’s Responsibility Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all material respects, by the directors on the basis specified in the JSE Listings Requirements based on our procedures performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus which is applicable to an engagement of this nature. This standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on the basis specified in the JSE Listings Requirements. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information. As the purpose of pro forma financial information included in a prospectus is solely to illustrate the impact of a significant corporate action or event on unadjusted financial information of the entity as if the corporate action or event had occurred or had been undertaken at an earlier date selected for purposes of the illustration, we do not provide any assurance that the actual outcome of the event or transaction at 31 December 2014 would have been as presented. A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in the compilation of the pro forma financial information provides a reasonable basis for presenting the significant effects directly attributable to the corporate action or event, and to obtain sufficient appropriate evidence about whether: •

The related pro forma adjustments give appropriate effect to those criteria; and



The pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

Our procedures selected depend on our judgement, having regard to our understanding of the nature of the company, the

27

corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances. Our engagement also involves evaluating the overall presentation of the pro forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria specified by the JSE Listings Requirements and described in paragraph 5 and Annexure 3 of the circular. Deloitte & Touche Registered Auditor Per: Mandisi Mantyi Partner 12 August 2015 Deloitte Place The Woodlands 20 Woodlands Drive Woodmead Sandton 2146 National executive: *LL Bam Chief Executive *AE Swiegers Chief Operating Officer *GM Pinnock Audit DL Kennedy Risk Advisory *NB Kader Tax TP Pillay Consulting *K Black Clients & Industries *JK Mazzocco Talent & Transformation *MJ Jarvis Finance *M Jordan Strategy S Gwala Managed Services *TJ Brown Chairman of the Board *MJ Comber Deputy Chairman of the Board. A full list of partners and directors is available on request. * Partner and Registered Auditor B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code Member of Deloitte Touche Tohmatsu Limited”

28

ARCELORMITTAL SOUTH AFRICA LIMITED Incorporated in the Republic of South Africa (Registration number 1989/002164/06) Share code: ACL ISIN: ZAE000134961 ("ArcelorMittal" or "the Company")

Notice of General Meeting of ArcelorMittal Shareholders Important Notice Where appropriate and applicable, the terms defined in the Circular to which this notice is attached and forms part of bear the same meanings in this notice, and in particular, the resolutions set out below. ArcelorMittal Shareholders are referred to the Circular, which sets out the information or explanatory material that they may require in order to determine whether to participate in the general meeting of Shareholders and seek to influence the outcome of the vote on the resolutions set out below. Notice of General Meeting of ArcelorMittal Shareholders Notice is hereby given to Shareholders that a general meeting of ArcelorMittal Shareholders will be held at The Hyatt Regency Hotel, 191 Oxford Road, Rosebank, Johannesburg, on Friday, 18 September 2015 at 09h00 to: (i) deal with such business as may lawfully be dealt with at the meeting and (ii) consider and, if deemed fit to approve, with or without modification, the resolutions necessary for the Scheme. In terms of the memorandum of incorporation and the JSE Listings Requirements, the quorum for the general meeting of ArcelorMittal Shareholders is persons holding at least 25% of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the general meeting of ArcelorMittal Shareholders (but not less than three ArcelorMittal Shareholders), present in person or represented by proxy at the general meeting. Section 63(1) of the Companies Act: Identification of meeting participants Kindly note that meeting participants (including proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in a meeting. Forms of identification that will be accepted include original and valid identity documents, drivers' licences and passports. Record dates In terms of sections 59(1)(a) and (b) of the Companies Act, the Board has set the record date for the purpose of determining which ArcelorMittal Shareholders are entitled to: • receive notice of the general meeting of ArcelorMittal Shareholders (being the date on which a Shareholder must be registered in the Register as a Shareholder in order to receive notice of the general meeting of ArcelorMittal Shareholders) as Friday, 7 August 2015 (therefore the last day to trade will be Friday, 31 July 2015); and • participate in and vote at the general meeting of ArcelorMittal Shareholders (being the date on which the Shareholder must be registered in the Register as a Shareholder in order to participate in and vote at the general meeting of ArcelorMittal Shareholders) as Friday, 11 September 2015 (therefore the last day to trade will be Friday, 4 September 2015). Special resolution number 1 – The disposal “Resolved that, subject to the fulfilment of the conditions precedent to the Sale Agreement and on the terms and conditions set out therein and the passing of Special Resolution Number 2, the disposal by Vicva of 21 103 219 ArcelorMittal Shares to the Trust, for an aggregate purchase consideration of R1 854 128 821, payable in accordance with the provisions of the Sale Agreement, is hereby approved.” In terms of the JSE Listings Requirements, Special Resolution Number 1, based on the requirements for specific issues for cash, must be passed as an ordinary resolution by a 75% (seventy five percent) majority of the votes cast in favour thereof by Shareholders present or represented by proxy at the general meeting. However, as the Companies Act prescribes that there must at all times be a margin of at least 10 percentage points between the highest established requirement for approval of an ordinary resolution on any matter, and the lowest established requirement for approval of a special resolution on any matter, the resolution is instead proposed to be passed as a special resolution. It must be noted that ArcelorMittal Shares held by the Company’s existing trusts or share schemes, or its Subsidiaries, will not have their votes taken into account for purposes of approval of this resolution to the extent so prescribed in the Listings Requirements.

Special resolution number 2 – Financial assistance in relation to the scheme “Resolved that, to the extent required by the Companies Act, the Board may, subject to the passing of Special Resolution Number 1 and subject to compliance with the requirements of the Company’s memorandum of incorporation (if any), the Companies Act, and the JSE Listings Requirements, authorise the Company to provide direct or indirect financial assistance to: (i) the Trust, as required to give effect to and in terms of the Trust Deed and/or the Contribution Agreement; (ii) any present or future Qualifying Employee participating in the Scheme, as required to give effect to and in terms of the Trust Deed.” In terms of the Companies Act, Special Resolution Number 2 must be adopted with the support of at least 75% (seventy five percent) of the voting rights exercised on the resolution by Shareholders present or represented by proxy at the general meeting. Special resolution number 3 – Financial assistance in relation to the LTIP “Resolved that, to the extent required by the Companies Act, the Board may, subject to compliance with the requirements of the Company’s memorandum of incorporation (if any), the Companies Act, and the JSE Listings Requirements, authorise the Company to provide direct or indirect financial assistance under the LTIP as required to give effect to and in terms of the LTIP, including through the funding of the acquisition cost of ArcelorMittal Shares for delivery to LTIP Participants in whom LTIP Conditional Awards have vested.” In terms of the Companies Act, Special Resolution Number 3 must be adopted with the support of at least 75% (seventy five percent) of the voting rights exercised on the resolution by Shareholders present or represented by proxy at the general meeting. Ordinary resolution number 1 – Authority granted to the Directors “Resolved, to the extent required, that each Director of ArcelorMittal be and is hereby individually authorised, on behalf of ArcelorMittal, to enter into, sign and/or despatch any and all such agreements, documents and notices, as may be necessary, expedient or desirable (in each case in the opinion of such Director) and do all such other things and procure the doing of all such things as may be necessary for or incidental to the implementation of the Scheme, and should any such agreements, documents or notices have been signed, or any such action taken before the date of this resolution, such signature or action be and is hereby ratified and approved.” The adoption of this Ordinary Resolution Number 1 will, to the extent required, authorise any director of the Company to execute all documents and do all such further acts and things as he may in his discretion consider appropriate to implement and give effect to the resolutions set out in this notice of General Meeting. It must be noted that Shares held by the Company’s trust or share scheme or Subsidiaries will not have their votes taken into account for JSE Listings Requirements resolution approval purposes. Voting and proxies A Shareholder entitled to attend and vote at the General Meeting is entitled to appoint a proxy or proxies to attend, speak and vote in his/her stead. A proxy need not be a Shareholder of the Company. For the convenience of registered Shareholders of the Company, a form of proxy is attached herewith. The attached form of proxy is only to be completed by those Shareholders who: • hold ArcelorMittal Shares in certificated form; or • are recorded on the electronic sub-register in “own name” dematerialised form. Shareholders who have dematerialised their Shares through a CSDP or Broker without “own name” registration and who wish to attend the General Meeting, must instruct their CSDP or Broker to provide them with the relevant letter of representation to attend the General Meeting in person or by proxy and vote. If they do not wish to attend in person or by proxy, they must provide the CSDP or Broker with their voting instructions in terms of the relevant Custody Agreement entered into between them and the CSDP or Broker. Shareholders who hold Dematerialised Shares which are registered in their name or if they are the registered holder of Certificated Shares may attend the General Meeting in person, alternatively, they may appoint a proxy or proxies, who need not be a Shareholder of the Company to represent them at the General Meeting by completing the attached form of proxy in accordance with the instructions it contains. It is requested that forms of proxy should be forwarded to reach the Transfer Secretaries at least 48 hours, excluding Saturdays, Sundays and South African public holidays, before the time of the General Meeting. Any form of proxy not delivered by this time may be handed to the Chairperson of the General Meeting immediately before the appointed proxy exercises any of the Shareholder’s votes at the General Meeting.

Electronic participation The Company has made provision for Shareholders or their proxies to participate electronically in the General Meeting by way of telephone conferencing. Should a Shareholder wish to participate in the General Meeting by telephone conference call as aforesaid, the Shareholder, or his/her/its proxy, will be required to advise the Company thereof by submitting by email to the company secretary at [email protected] or by fax to +27 (0) 16 889 2517 for the attention of Ms Nomonde Bam, relevant contact details, including an email address, cellular number and landline number, as well as full details of the Shareholder’s title to the Shares and proof of identity, in the form of certified copies of identity documents and Share certificates (in the case of Certificated Shares) and (in the case of Dematerialised Shares) written confirmation from the Shareholder’s CSDP confirming the Shareholder’s title to the Dematerialised Shares, to reach the Company by no later than 09h00 on Wednesday, 16 September 2015. Upon receipt of the required information by the Company, the Shareholder concerned will be provided with a secure code and instructions to access the electronic communication during the General Meeting. Shareholders must note that access to the electronic communication will be at the expense of the Shareholder who wish to utilise the facility. Shareholders and their appointed proxies attending the General Meeting by conference call will not be able to cast their votes at the General Meeting through this medium. Accordingly, Shareholders making use of the electronic participation facility are requested to submit their forms of proxy to the Company, as directed in this Circular. By order of the Board Nomonde Bam Group Company Secretary Vanderbijlpark 19 August 2015 Registered office Room 3-3, Delfos Boulevard Vanderbijlpark, 1911 South Africa Transfer Secretaries Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street Johannesburg, 2001 South Africa

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Circular to ArcelorMittal Shareholders (ESOP) - ArcelorMittal South

Corporate information Company Secretary of ArcelorMittal Nomonde Bam 3rd Floor, Main Building Delfos Boulevard Vanderbijlpark, 1911 South Africa (PO...

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