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ArcelorMittal says US buy won't impact $15 billion debt target

Reuters  Brussels, December 01, 2013
First Published: 20:19 IST(1/12/2013) | Last Updated: 20:21 IST(1/12/2013)

ArcelorMittal's acquisition of a US plant jointly with Nippon Steel & Sumitomo Metal Corp will not affect the world No 1 steelmaker's debt targets, ArcelorMittal's chief executive said on Sunday.


ArcelorMittal unveiled the $1.55 billion takeover of ThyssenKrupp's US steel finishing plant in Calvert, Alabama, on Friday, saying it would finance the deal via equity and debt at the joint venture level.

ArcelorMittal chief executive Lakshmi Mittal told reporters on a conference call the deal would have a minimal impact on this year's debt and no effect on its medium term debt target. The company estimates net debt of $17 billion by the end of 2013, falling to $15 billion in the medium term.

Chief financial officer Aditya Mittal said ArcelorMittal and Nippon would split the equity cost of the deal.

"The ratio of debt to equity is 2 to 1 which implies $1 billion of debt on the joint venture. As it is a $1.55 billion deal, it's $258 million of equity financing for ArcelorMittal," he said.

He said the equity financing and the debt of the joint venture would not be consolidated in ArcelorMittal's balance sheet.

Lakshmi Mittal said he did not see any US antitrust issues.

"We do not anticipate major problems from the antitrust authorities, the Department of Justice, the Department of Commerce," he said.

He also repeated his forecast for global steel consumption growth of 3%-3.5% this year, saying the US steel market had bounced back to its pre-crisis level while the European market continued to be week.

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