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ArcelorMittal sales almost halve Steelmaker to raise $3bn funding
(about 8 hours later)
ArcelorMittal has seen its quarterly sales almost halve with the global recession hitting demand for steel. ArcelorMittal has announced plans to raise $3bn (£2bn) of extra funding from shareholders, after a slump in sales.
Revenues at the world's largest steelmaker fell to 15bn euros ($19.8bn; £13.5bn) in the three months to 31 March, from 29.8bn euros a year ago. Revenues at the world's largest steelmaker fell to $15.1bn (11.6bn euros; £10.2bn) in the three months to 31 March, from $29.8bn a year ago.
As a result, the firm posted a quarterly loss of 1.06bn euros, its second in succession. A year earlier it had reported a 2.37bn-euro profit. As a result, the firm reported a quarterly loss of $1.06bn, its second in succession.
The Mittal family, which runs the firm, said it would subscribe for at least 10% of the offering of common stock.
Raising funds
Demand for steel has been hit by the global recession. A year earlier ArcelorMittal had reported a profit of $2.37bn.
Although market conditions remain challenging, a technical recovery is inevitable and ArcelorMittal will benefit from this, Lakshmi Mittal, ArcelorMittal chairman and chief executive
After announcing its results, the company revealed its intention to raise cash to reduce its debts and strengthen its balance sheet.
It will offer investors about $2.5bn worth of shares and about $500m of convertible senior notes.
The notes will be convertible into ordinary shares, cash, or a combination of cash and shares, upon maturity in 2014.
Production freeze
ArcelorMittal is based in Luxembourg but led by India's Lakshmi Mittal.ArcelorMittal is based in Luxembourg but led by India's Lakshmi Mittal.
The firm said it would continue to freeze production while demand remains low from the global construction industry, carmakers and other main steel users.The firm said it would continue to freeze production while demand remains low from the global construction industry, carmakers and other main steel users.
Although market conditions remain challenging, a technical recovery is inevitable and ArcelorMittal will benefit from this, Lakshmi Mittal, ArcelorMittal chairman and chief executive
Earlier this month it announced it would be delaying the launch of two new plants in India by up to two years, saying the move was "only prudent" given the fall in steel sales.Earlier this month it announced it would be delaying the launch of two new plants in India by up to two years, saying the move was "only prudent" given the fall in steel sales.
It also said it had refinanced 909m euros of debt until 2012. It also said it had refinanced $1.2bn of debt until 2012.
It announced in November that it was offering voluntary redundancy to 9,000 employers, about 3% of its total global workforce.It announced in November that it was offering voluntary redundancy to 9,000 employers, about 3% of its total global workforce.
Despite the latest weak results, Mr Mittal said the firm remained on a strong footing.Despite the latest weak results, Mr Mittal said the firm remained on a strong footing.
"Although market conditions remain challenging, a technical recovery is inevitable and ArcelorMittal will benefit from this," he said."Although market conditions remain challenging, a technical recovery is inevitable and ArcelorMittal will benefit from this," he said.