Mumbai: Global steel giant ArcelorMittal will sell a 50% stake in its shipping arm Global Chartering Ltd to DryLog Ltd to form a joint venture and pare its debt, the company announced on Monday.

The transaction is expected to complete before the 2019-end, ArcelorMittal said in a statement. "The stake sale and JV formation will ultimately impact ArcelorMittal's net debt by USD 530 million, with USD 400 million on completion and a further USD 130 million due in early 2020," the steelmaker said.

"ArcelorMittal has signed a share purchase agreement with DryLog Ltd (DryLog) for the sale of a 50% stake in Global Chartering Limited (GCL), its wholly-owned shipping business, and will subsequently form a 50:50 shipping joint venture with DryLog. The transaction is expected to close before the end of 2019," it said.

GCL operates 28 dry cargo vessels, which range from Supramax to cape size, 25 of which are on long-term leases and will be transferred into the joint venture, with the remaining three being owned outright.