'Mittal goes on with acquisition loan increase'

Banks supporting Mittal's bid for Arcelor are pushing ahead with plans to increase debt facilities that may finance a potential merger.

Banks supporting Mittal Steel's increased bid for rival Arcelor are pushing ahead with plans to increase the debt facilities that may finance a potential merger, a banking source familiar with the situation said on Tuesday.

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An initial round of syndication of an 8 billion euro ($10.21 billion) loan to cover the cash component of its original bid and refinance $3.5 billion of existing debt has already been completed earlier this month and was oversubscribed.

Arranging banks are now looking to increase the deal size by 2.8 billion euros and have asked existing lenders to recommit on the basis of the increased deal size, the source told Reuters LPC.

Citigroup, Goldman Sachs and SG CIB along with Commerzbank, CSFB and HSBC are arranging the financing package for Mittal.