Steel giant ArcelorMittal said it has successfully completed a $3 billion rights issue, proceeds of which will be utilised to pare debt. In February, the luxembourg-headquartered steelmaker had announced plans to reduce its $15.7 billion net debt by nearly a quarter. In March, it came out with a $3 billion rights issue to reduce debt after losses widened seven-fold in 2015 to $7.9 billion.
In a statement late last night, the world's largest steel manufacturer said there was strong investor support for its rights issue with total subscription rate of 126.9 per cent.
“1,229,905,208 new shares were subscribed for through the exercise of primary subscription rights under the rights, representing 97.4 per cent of new shares to be issued,” it added.
Oversubscription demand amounted to 372,398,986 new shares, representing 11.5 times the number of surplus shares available after satisfaction of the primary subscription rights, and will as a result be satisfied only in part, that is for 32,446,323 new shares, ArcelorMittal said.
“As announced on February 5, 2016, ArcelorMittal intends to use the net proceeds of the rights issue to reduce its indebtedness and to strengthen its balance sheet,” it added.