02/10/2016

ArcelorMittal, Luxembourg

ArcelorMittal reduces net debt by US$4 billion

ArcelorMittal announces a proposed capital raise of US$3.0 billion which, alongside the sale of its minority stake in Gestamp for approximately US$1 billion, would reduce pro forma net debt as of 31 December 2015 by US$4 billion to below US$12 billion. The Company separately announces a five-year strategic roadmap, the ArcelorMittal Action 2020 plan, which sets out improvement plans for each of its five business segments and aims to improve Ebitda and free cash flow performance.


Features of the c.US$3.0 billion share capital increase, expected to be completed in H1 2016, include:



  • Capital increase by way of a rights issue for ArcelorMittal shareholders

  • The Mittal family has committed to take up its pro-rata entitlement corresponding to approximately US$1.1 billion

  • ArcelorMittal has entered into a standby underwriting commitment with Goldman Sachs International, BofA Merrill Lynch and Crédit Agricole Corporate and Investment Bank, acting as Joint Global Coordinators, pursuant to which the Joint Global Coordinators undertook to underwrite the capital increase for the remaining amount, subject to customary conditions.


Additionally the Company will receive approximately US$1 billion from sale of its 35% shareholding in Gestamp which is expected to be closed by the end of June 2016.  ArcelorMittal will continue its supply relationship with Gestamp through its 35% shareholding in Gonvarri, a sister company of Gestamp.


Assuming completion of the rights issue and factoring in the Gestamp sale proceeds, the Company’s net debt at 31 December 2015 would be less than $12bn representing 2.2x 2015 Ebitda.


Mr. Lakshmi Mittal, chairman and CEO of ArcelorMittal, commented: “This capital raise, combined with the sale of our minority shareholding in Gestamp, will accelerate the company’s debt reduction plans and enable us to reduce net debt to less than US$12 billion. 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.


“The Company had already announced plans to reduce the cash requirements of the business and improve Ebitda in 2016. A more detailed long-term strategic review has now been completed, setting out the performance improvement potential for the five year period to 2020.


Looking ahead it is clear that those steel companies with a combination of the right assets, the right strategy and the right balance sheet will prosper. We are confident ArcelorMittal has this combination and that we are in a strong position to deliver on the targets identified and cement our position as the world’s leading steel company.”


ArcelorMittal, Luxembourg