Thursday, September 27, 2007

Mittal Unit, Romania Face EU Probe of Debt Waivers

By Anthony Aarons

Sept. 26 (Bloomberg) -- The European Union will investigate the legality of 26 million euros ($37 million) in state aid that the Romanian government gave to Mittal Steel Roman SA before it was privatized.

The investigation will look at whether public authorities agreed to waive and reschedule outstanding debts during the privatization of the company, formerly known as Petrotub, in 2003, the European Commission said in a statement. The company was bought by Mittal Steel and is now a unit of ArcelorMittal.

The commission, the EU's regulator in Brussels, said Romanian authorities waived 25 million euros in debt and rescheduled another 520,000 euros before the company was sold.

The press office of Prime Minister Calin Tariceanu had no immediate comment on the investigation. Romania argued that the privatization, taking into account the debt waivers, was economically more advantageous than liquidating Petrotub, the EU said.

Calls to Nicola Davidson, a spokeswoman for Luxembourg-based ArcelorMittal in London, weren't immediately returned.

To contact the reporter on this story: Anthony Aarons in London at aaarons@bloomberg.net .

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