ArcelorMittal (MT), the world’s biggest steelmaker, hired Goldman Sachs Group Inc. (GS:US) to sell as much as half its 25 percent stake in Turkish steelmaker Eregli Demir & Celik Fabrikalari TAS (EREGL) as it seeks to reduce debt.
ArcelorMittal will sell a package of 134.3 million shares and issue warrants in respect of another 134.3 million shares, according to an e-mailed statement today. The 268.6 million shares are worth 1.07 billion liras ($600 million), according to today’s share price.
“This decision is very much in line with our declared group strategy of focusing on core assets and reducing net debt,” ArcelorMittal said in the statement. “Bookbuilding will commence immediately.”
The sale will reduce ArcelorMittal’s stake in Erdemir, Turkey’s largest steelmaker, to about 18.7 percent, and further to about 12.5 percent should all of the warrants be exercised, ArcelorMittal said.
ArcelorMittal fell 0.4 percent to 14.715 euros at 5:20 p.m. on the Netherlands AEX Index in Amsterdam.
The shares and warrants are to be sold “by way of a single accelerated bookbuilt offering to institutional investors,” the company said. Goldman Sachs is the sole bookrunner, it said.
Net debt fell by $2.4 billion in the fourth quarter to $22.5 billion and a further reduction is anticipated from “non- core” asset sales, the company said on Feb. 7.
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