LONDON: ArcelorMittal plans to raise $3 billion from investors and sell a $1 billion stake in Spanish auto-parts maker Gestamp as the world’s largest steelmaker looks to ride out an industry slump caused by record Chinese exports.
Billionaire Lakshmi Mittal, the chief executive officer who owns about 37 per cent of the business, has committed to maintain his stake and his family will take up about $1.1 billion, the Luxembourg-based company said in a statement on Friday. Full-year earnings before interest, taxes, depreciation and amortisation declined 28 per cent to $5.2 billion.
“This capital raise, combined with the sale of our minority shareholding in Gestamp, will accelerate the company’s debt- reduction plan,” Mittal said in the statement. “This will help ensure that the business is resilient in any market environment and puts ArcelorMittal in a position of strength from which to further improve performance.”
Shares of ArcelorMittal, which supplied steel for New York’s One World Trade Center and London’s Wembley stadium, have dropped 58 per cent in the last 12 months. They’ve been hit by declining prices for steel as China pushes the material onto the world market at record levels to counter its slowing economy.
Prices for the iron ore ArcelorMittal mines have also dropped as demand for the steelmaking ingredient fell and supplies from exporters expanded. The stock fell as much as 11 per cent, the biggest intraday drop since December 2, to 3.3 euros and traded 6.1 per cent lower at 3.46 euros by 9:12am in Amsterdam.
