ArcelorMittal takes $4.3-bn writedown on European business

ArcelorMittal, the world's largest steelmaker, yesterday said that it will write down the value of its European business by about $4.3 billion as the eurozone debt crisis ravages the region with steel manufacturers taking the hardest hit.

The Luxembourg-based steelmaker said that demand had fallen by about 29 per cent since 2007 and about 8 per cent in Europe this year and there was no sign of a quick recovery.

This is in contrast to the US, where steel consumption has risen almost 8 per cent this year and is now approximately 10 per cent lower than it was in 2007.

As a result, it will write down the value of its European operations by 87 per cent.

The company, which formed through the $33-billion merger in 2006 between Indian-born steel tycoon Lakshmi Mittal's steel business and European steelmaker Arcelor, said the non-cash charge would be taken in the fourth quarter and would affect its net profit, which it expects to report on 6 February.

ArcelorMittal, which reported a third quarter net loss of $709 million, said that lowering its massive $23.2-billion debt, is now its top priority.