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Debt-laden ArcelorMittal plans $3.5-billion share, convertible issue

An undated photo of an ArcelorMittal steel worker.


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.

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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.

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