Niigata Global allegedly announced in a meeting recently that ArcelorMittal raised $500 million above the targeted $3.5 billion after selling convertible bonds and shares. The fund raising effort was in response to the Luxembourg based ArcelorMittal’s struggling balance sheet issues, which have now been completely alleviated thanks to this successful fund raising effort. They had their credit status cut to junk last year.
The world’s largest steel producer had been concerned that they were too leveraged, but are now in a much stronger position to navigate the tough global markets.
Niigata Global apparently believe that ArcelorMittal had originally planned to raise $3.5 billion, in an effort to cut its debt from $22 billion as of the end of the year, to about $17 billion by the end of the second quarter of the year. The company has already undergone a dividend reduction, cost cutting measures and divested some assets in support of that target.
Niigata Global reportedly revealed that ArcelorMittal confirmed to the breakdown of the fund raising effort, with $1.75 billion being raised from a share sale at $16.74, a discount of 4.4 percent on the closing price before the sale was announced, and $2.25 billion raised through mandatory convertible notes that have a 6 percent coupon.
ArcelorMittal also said that they were looking very seriously at the assets of rival ThyssenKrupp, stating that a bid for the German company’s state of the art steel mill in Alabama has already been submitted.