NTGL rushes to sign Mittal steel deal
19 August 2005
 


 

The National Transitional Government of Liberia is reportedly rushing to sign and ratify the One Billion United States Dollars Mittal Steel deal before the elections, The Analyst has learned.

The action comes quickly after the withdrawal of the Writ of Prohibition from the Supreme Court by Global Infrastructure Holdings Limited (GIHL).

Followers of the case suspect collusion among the two Mittal brothers, Pramod and Laskhmi, saying that the rush to sign and ratify the deal before the elections can only benefit one presidential candidate, Cllr. Varney Sherman of the Liberian Action Party, whom they suspect has been enjoying a massive support from Chairman Bryant. In newspaper ads taken over the last two weeks, the Development Council of Liberia, (DCL), a public advocacy group of professionals say "collusion" among the brothers, and the inordinate speed being employed by the Bryant-led NTGL will only benefit officials of the NTGL and Cllr. Sherman. However, a source from Cllr. Sherman camp has refuted the claim saying that "Sherman has his own money." Many believe that a transaction of this nature commands legal fees approaching millions of dollars, and they say such an amount would certainly go to Sherman Law Firm which offers legal counsel for Mittal Steel.

Thus the signing of this agreement under current circumstances and the dispatch being utilized are indications of a feverish attempt to fill the presidential coffers of lawyer-turned- politician.

In other developments, GIHL has absconded Liberia, owing hundreds of thousands of dollars in consultancy fees and other obligations.

A confidential source told the Analyst that a lawyer representing GIHL at the conclusion of the proceedings at the Supreme Court is threatening legal actions against the company for non-payment of fees.

Negotiations between the Minerals Technical Committee (MTC) and Mittal Steel have reportedly reached an impasse.

Sources close to the MTC say most of the arguments advanced by Mittal Steel, including its preparedness to fund the LIMINCO project out of its multibillion dollar investment fund have not been met.

Instead, our sources said, the company is asking the Government of Liberia to guarantee hundreds of millions of dollars in loan to fund the project.

The sources say Mittal is now proposing a complex arrangement of equity participation that will eventually see the company owning ninety percent of the project while the Government of Liberia will get a measly ten percent.

A mineral economist said the use of debt financing will adversely affect profitability of the project as interest income should be significant.

This will reduce net profits and impact negatively upon future dividends flow. The expert says the MTC should employ the services of experts, probably investment bankers to advice them on the complex financial nature of the one billion dollar investment.

More significantly, many politicians say the rush to sign this agreement only week before general elections in Liberia under mounting allegations of massive corruption within the NTGL should be resisted.

They would prefer that the Government of Liberia defer negotiations and signing of this agreement to the incoming administration in January 2006.

 
   
Source: The Analyst

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