* Industrialist willing to invest 400 mln euros - minister
* Minister raises pressure on ArcelorMittal to agree sale
(Updates with denial of GDF share sale plans)
By Nicholas Vinocur and Myriam Rivet
PARIS, Nov 28 (Reuters) - The French government has found an
industrialist willing to invest 400 million euros ($516.4
million) to renovate ArcelorMittal's Florange
steelworks in northeast France, a minister said on Wednesday.
Raising pressure on the group to agree to a sale, Industry
Minister Arnaud Montebourg told lawmakers the interested party
was a private steel industry investor who wanted to inject money
into the site with financial backing from the state.
Montebourg has been pushing hard for the Florange steelworks
to be taken temporarily into state hands if Luxembourg-based
ArcelorMittal refuses to keep two threatened blast furnaces
"(The party) is ready to invest nearly 400 million euros to
renovate this site," Montebourg told parliament during question
time, without giving the potential investor's identity.
Montebourg, who spoke as metal workers protested outside the
National Assembly, said the aim was for the operation to have
zero cost to public finances and that government stakes in other
companies could be used to finance a purchase of Florange.
He added that France was ready to move ahead with a
temporary takeover of the site if no deal was reached. The
government would compensate ArcelorMittal for the takeover and
let a private industrialist run the steelworks while it looks
for a permanent buyer to operate it.
Union officials later said Montebourg had told them the
government was considering selling a 1 percent stake in energy
group GDF Suez to finance a rescue of the steelworks,
which has become emblematic of President Francois Hollande's
struggle to stem a wave of industrial layoffs.
However, Montebourg later issued a statement saying that the
sale of GDF shares was not under consideration. It said that he
had told unions that a temporary nationalisation would have no
net impact on the state finances if it were offset by the sale
of state-held shares.
CFDT union official Jean-Marc Vecrin had earlier told
reporters that the government had told union members that it
expected it could raise 420 million euros from the sale of GDF
shares. A second CFDT union official had also said the
government was mulling the sale of GDF shares.
President Francois Hollande told journalists in Paris that
talks were taking place with ArcelorMittal and potential buyers,
a day after he pressed Chief Executive Lakshmi Mittal to keep
the furnaces running.
"He is waiting for Mr. Mittal to come up with a proposal
other than the site's closure, or else the government intends to
nationalise it temporarily," said Edouard Martin, a Florange
union leader camping in front of France's finance ministry.
ArcelorMittal has so far said it wants to sell only the
idled furnaces and not the entire site, a steelworks that
employs some 600 people in the heart of what was once French
steelmaking country near the German border.
The company has told France's Socialist government that it
plans to shut the furnaces, which it says are no longer
economically viable, unless a buyer willing to take them over
can be identified by Dec. 1.
Steel industry experts say it would be tough to find a buyer
for the furnaces alone without the adjacent steel plant.
"Discussions are ongoing," a London-based spokesman for
ArcelorMittal said when asked if the firm would be ready to sell
the Florange steelworks. He would not elaborate.
Earlier, Finance Minister Pierre Moscovici said the prospect
of a temporary nationalisation of Florange was a special case
and did not meant that further state takeovers for threatened
factories were being prepared.
The government owns 36 percent of GDF Suez. One percent of
the company's capital would be worth 408 million euros at
Wednesday's share price of 16.92 euros.
($1 = 0.7733 euros)
(Additional reporting by John Irish, Leigh Thomas and Miriam
Rivet in Paris and Philip Blenkinsop in Brussels; Editing by
Catherine Bremer and Jason Webb)