The French government has found an industrialist willing to invest €400-million ($514-milllion) to renovate ArcelorMittal's Florange steelworks in northeast France, a minister said.
Raising pressure on the group to agree to a sale, Industry Minister Arnaud Montebourg told lawmakers the interested party was a private investor from the steel industry who wanted to inject money into the site with the financial backing of the French state.
France has raised the prospect of the site being taken temporarily into state hands if ArcelorMittal refuses to keep two threatened blast furnaces running.
"(The party) is ready to invest nearly €400-million to renovate this site," Mr. Montebourg told parliament, without giving the potential buyer's identity.
Mr. Montebourg, who spoke as metal workers protested outside the National Assembly, said the aim was for the operation to have a 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.
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 nationalize 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 steel making 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.