Shares in G Steel Pcl fell sharply on Wednesday after the debt-ridden Thai company said ArcelorMittal SA, the world's top steel maker, had pulled out of a deal to buy a stake in it.

G Steel, Thailand's second-biggest steel maker by capacity, told the stock exchange it had received a notice from ArcelorMittal that the deal was off because all the conditions had not been satisfied.

At 0710 GMT, G Steel stock was down 9.8 percent at 0.37 baht. It had fallen nearly 15 percent to an eight-week low when the market opened. The main index was up 1.1 percent.

Luxembourg-based ArcelorMittal said in a filing with the Thai Securities and Exchange Commission that the share purchase agreement could not go through "due to factors that are beyond the control of ArcelorMittal".

G Steel declined to comment.

In March, G Steel said ArcelorMittal planned to buy a 40 percent stake in it through the purchase of new shares for 7.51 billion baht ($241 million).

Analysts said the cancellation was a blow to its restructuring and it would take time for it to find new partners.

KT Zmico Securities said in a research note the news was negative for the share price outlook and handed an advantage to its bigger rival, Sahaviriya Steel Pcl.

G Steel, which makes hot rolled coil and slab in Thailand, reported a third-quarter net loss of 836.9 million baht, bringing its net loss for the first nine months to 1.61 billion.

Analysts have cut the ratings of steel companies globally as the industry faces slow economic growth in Europe and the United States.

ArcelorMittal, which makes between 6 and 7 percent of global steel, said last month that a dip in demand was deepening into a second-half slump and customers were increasingly cautious due to economic uncertainties.

source:mineweb.com