ArcelorMittal gets shareholders' nod for $15-billion share issue

Mumbai: Shareholders of global steel giant ArcelorMittal have authorised the company's board to issue fresh shares worth an estimated $15 billion to finance future acquisitions.

ArcelorMittal shareholders approved the proposal to issue 147 million fresh equity shares, representing about 10 per cent of its outstanding share capital, worth about $14.3 billion, at an extra-ordinary general meeting (EGM) in Luxembourg late yesterday. 

The board sought to enlarge the equity capital to 1.617 billion to facilitate the issuance of new shares "for merger, acquisitions or similar transactions."

The shareholders also voted to limit or cancel preferential subscription rights of existing shareholders till 5 November 2012.

The board "considers it of paramount importance in the globalisation context of the steel industry to be in a position to issue additional shares as a means to enter into potential growth opportunities and consequently, conclude mergers, acquisitions or any other similar transactions, amongst others, by way of exchange of shares," the company said in its notice to shareholders.

The board cited the need to enter into potential growth opportunities for the company and its subsidiaries while offering shares in exchange rather than cash. 

The approval would equip ArcelorMittal better for future deals without having to draw down its cash position. ArcelorMittal was created after takeover of European giant Arcelor SA by Mittal Steel. The company's chief financial officer, Aditya Mittal, also the son of Lakhsmi Mittal, is reported to be still keeping a huge list of potential deals.

Mittal Jr was a key player in the Arcelor takeover and is believed to have been involved in a number of other deals too. Arcelormittal, 43-per cent owned by the Mittals, with a market value in excess of $140 billion, is the world's largest steel group.