Jan 24 2007
Mittal Steel Company N.V. announced that the President of the Rotterdam District Court today denied ThyssenKrupp AG’s petition for an order directing Mittal Steel to cause Arcelor S.A. to initiate legal proceedings against the Strategic Steel Stichting, which currently owns 89% of Dofasco Inc., the North American steel producer, with a view to forcing the Stichting to dissolve. Among other reasons for its decision, the Court stated that Mittal Steel cannot be expected to do more than it has already done in order to seek dissolution of the Stichting.
ThyssenKrupp sued Mittal Steel in the Rotterdam District Court on December 22, 2006 alleging that the Letter Agreement, dated January 26, 2006, regarding the sale of Dofasco, required Mittal Steel to cause Arcelor to bring suit to dissolve the Stichting, and seeking a Court order directing Mittal Steel to do so. On April 3, 2006, Arcelor transferred 89% of Dofasco’s shares to the Stichting, thereby preventing Mittal Steel or Arcelor from selling Dofasco unless the Stichting is dissolved and returns the shares.
The Letter Agreement can be terminated if the sale is not completed by April 26, 2007. By resolutions adopted respectively on September 25 and October 11, 2006, the Boards of Directors of Mittal Steel and Arcelor had formally requested that the Stichting dissolve and return the Dofasco shares to Arcelor. On November 10, 2006, the Stichting’s board of directors unanimously decided not to dissolve and to retain the Dofasco shares, thereby continuing to prevent their sale.
Mittal Steel defended ThyssenKrupp’s suit on the grounds that the Letter Agreement did not require it to initiate legal proceedings against the Stichting because the prospects for success of such a lawsuit were remote, based on advice received from Dutch legal experts. As previously announced, the respective Boards of Directors of Mittal Steel and Arcelor decided on January 9, 2007 not to commence such litigation, based on such advice.