ArcelorMittal Prices Stock for $3 Billion Rights Offering

  • New shares to be sold at 35% discount to price on Thursday
  • Steelmaker is trying to reduce $15.7 billion debt pile

ArcelorMittal will sell new stock to shareholders at 2.20 euros ($2.44) each as the biggest steelmaker raises about $3 billion to cut debt.

The Luxembourg-based company will sell seven new shares for every 10, it said in a statement Friday. The shares in the rights offering will be sold at a 35 percent discount to Thursday’s ”theoretical ex-rights” price, and the family of Chief Executive Officer Lakshmi Mittal will maintain their 37 percent holding in the company. The firm said last month it would offer shares.

ArcelorMittal, which supplied steel for New York’s One World Trade Center and London’s Wembley stadium, is tapping up shareholders to help pare its $15.7 billion debt pile. The company has slumped about 55 percent in the past year as record Chinese steel exports sent the material tumbling and undercut prices in Europe and the U.S.

ArcelorMittal rose 5.5 percent to 4.478 euros by 1:42 p.m. in Amsterdam.

The company has scrapped its dividend, cut expansion plans and shuttered plants to help reduce borrowings. ArcelorMittal reported a $7.9 billion net loss last year and said it expected earnings before interest, taxes, depreciation and amortization to fall further this year.

The offering is being underwritten by Goldman Sachs Group Inc., Bank of America Merrill Lynch and Credit Agricole SA.

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