ArcelorMittal, the world’s largest steel maker, will issue $3.5-billion (U.S.) issue of shares and convertible notes to sharply reduce a heavy debt level that has led to a cut in its credit rating to junk status.
The company said in a statement on Wednesday that the equity and debt issue, the exact make-up of which had yet to be determined, would help to reduce its net debt to about $17-billion by the end of June, from an expected $22-billion at the end of 2012.
ArcelorMittal shares fell following the announcement.
Chairman and Chief Executive Lakshmi Mittal said the new issue, along with asset disposals, a planned reduction in dividends and cost-savings would bring forward the achievement of a medium-term debt target of $15-billion.
The Mittal family intends to pump $600-million into the new shares and notes.
The mandatory convertible subordinated notes would have a maturity of three years and pay a coupon in the range of 5.875 to 6.375 per cent.Report Typo/Error