ArcelorMittal challenges Tauron's claim to exercise put option to sell Tameh Holding stake

ArcelorMittal has denied claims by the Polish energy company Tauron Polska Energia that the Luxembourg-based steel giant has acquired Tauron’s stake in Tameh Holding, a power utility they own jointly, ArcelorMittal said on January 3.

Tauron said on January 2 that it accepted a PLN 598.1mn (€137.38mn) offer from AM Global Holding, an ArcelorMittal company, for Tauron’s 50% stake in Tameh Holding. The other 50% is already owned by ArcelorMittal. 

"ArcelorMittal disputes Tauron’s statement that it has exercised its put option and has not purchased any of Tauron’s shareholding in Tameh Holding. ArcelorMittal intends to contact Tauron to discuss the situation," the steel company said in a statement.

Tauron's press office told the Polish state-run newswire PAP that the company "completely denies the statements made in ArcelorMittal's announcement", adding that it executed a sale option included in a partnership agreement with ArcelorMittal covering the companies' cooperation in Tameh Holding.

Tauron said that offloading its stake to ArcelorMittal had to do with Tameh Holding’s problems in the Czech Republic.

"The primary reason for [Tauron’s executing the sale option to ArcelorMittal] stems from Liberty Ostrava steelworks' failure to fulfill its obligations to Tameh Czech, a company operating within Tameh Holding. Consequently, the Czech company has filed for bankruptcy," Tauron said according to PAP.

Liberty Ostrava has failed to pay its power bills because of a liquidity crisis, which has forced it to seek protection from creditors. 

"In light of the deadlock surrounding the approval of Tameh Holding's business plan, Tauron has opted to invoke the provision in the partnership agreement, allowing for the sale of our shares in Tameh Holding to our partners in the ArcelorMittal Group," Tauron also said.

Tauron is one of the key players in Poland's energy sector, with coal mining, electricity generation, and power distribution divisions, with an approximate 8% share in Poland’s energy market.

Tauron’s stocks fell 2.29% to PLN 3.63 on January 4 on the Warsaw Stock Exchange.