ArcelorMittal to raise $4 billion via equity, debt issues
02 May 2009
Global steel giant ArcelorMittal proposes to raise around $4 billion through sale of $700 million in convertible debentures and a public issue of about 140 million common stock.
ArcelorMittal, which registered a $1.1 billion first quarter 2009 loss, said it plans to sell 125.1 million common shares at an offer price of $22.77 (euro 17.10) each. Underwriters will have the option to purchase up to an additional 15.7 million common shares in one month, the company said.
The company plans to use the money so raised to strengthen its balance sheet among other things. The proceeds of the common stock will be used to strengthen its balance sheet while the proceeds of the convertible senior note offering will go to extend debt maturity profile and refinance existing debt, the company said.
"Total aggregate proceeds from the stock offerings are about $3.5 billion or $4 billion, in each case before deduction of underwriting discounts and commissions," the company said in a statement.
ArcelorMittal has priced its public issue of $700 million convertible securities due to mature on 15 May 2014 at 5 per cent. The bonds are due to mature on 6 May 2009, it said, adding that underwriters have an option to purchase $100 million in notes to cover overallotments.
ArcelorMittal, on Wednesday reported a net loss of $1.1 billion in the January-March 2009 quarter amidst plummeting demand for steel.
The company is delaying some of its project and abandoning some non-core projects.
