ArcelorMittal has sold part of its stake in a Chinese steelmaker it wants to control so it can meet the minimum free float requirement in Hong Kong where the shares trade.

The world's largest steelmaker, run by London-based billionaire Lakshmi Mittal, sold a 17.4 per cent stake in China Oriental to ING Bank and Deutsche Bank for HK$2.95bn ($378m).

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The disposal restores the free float in China Oriental to 25 per cent.

ArcelorMittal and Han Jingyuan, China Oriental's chairman and chief executive, controlled 92 per cent of the company after a general offer closed in February.

The general offer was ordered by the Securities and Futures Commission, Hong Kong's market regulator, in December. The SFC ruled that Mr Han had been acting in concert with ArcelorMittal last year when he repelled a rival offer for the company by Diana Chen, a former China Oriental director.

Last year, ArcelorMittal paid $647m for Ms Chen's 28 per cent stake in China Oriental. It also negotiated an agreement with Mr Han to acquire his controlling 45 per cent stake, but that deal has yet to be approved by Chinese regulators, who have been reluctant to let foreign companies take control of local steelmakers.

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The SFC's order that ArcelorMittal make a general offer for all of China Oriental's shares had threatened to place it in breach of Chinese restrictions on foreign control.

With the share sale to ING and Deutsche, ArcelorMittal's stake has fallen back to 29.6 per cent, from 47 per cent. The banks agreed to sell the shares back to ArcelorMittal if it gets a controlling stake in China Oriental on its own.

ArcelorMittal is keen to increase its foothold in the world's largest steel market. It has held talks with Angang Steel, China's number two steelmaker. It also has a 32 per cent stake in Hunan Valin Tube Steel & Wire in a deal that is the first - and so far only time - the Chinese government has allowed a foreign business to take a strategic stake in a large domestic steelmaker.

ArcelorMittal first attempted to enter the China market with a $900m offer for a 38 per cent stake in Laiwu Steel, another small Chinese mill. It was forced to abandon the effort late last year after waiting two years for Beijing to approve the transaction.

ING paid HK$1.68bn for a 9.9 per cent stake in China Oriental, and Deutsche paid HK$1.27bn for 7.5 per cent of the company. Both banks paid HK$5.79 a share, representing a 5.4 per cent discount to ArcelorMittal's general offer price.

China Oriental's shares, which were suspended in February and resumed trading on Friday afternoon, fell 4.8 per cent to HK$5.72.