ArcelorMittal dismisses €5-billion recapitalisation as speculation

17 March 2009

The world's biggest steelmaker ArcelorMittal has denied media reports that it is seeking to increase its capital through a €5-billion ($6.5 billion) share issue as sheer speculation, although it has not ruled out such an option in the future.

Saying that the report was "without foundation and speculation", the Luxembourg-based steel maker was responding to an article published in the Financial Times, which speculated that ArcelorMittal was considering a share issue to raise capital.

The Financial Times went on to say that the steel maker was rumoured to have hired J.P. Morgan and Deutsche Bank to handle the rights issue, where existing share holders could buy one share for every two they own for €8, which was 44 per cent below the closing price on Monday.

The company said in a statement that "ArcelorMittal has a successful debt-reduction programme in place and does not need to raise additional capital through a rights issue at this time.''

"The company has not retained any specific advisors for this purpose and the rumors within this article are without foundation and speculative. However, the company will continue to review and consider all options as is only prudent given the current challenging operating environment," it added.

Last month, ArcelorMittal reported its first ever loss of $2.6 billion in the last quarter as it wrote down the value of assets, inventories and raw-material contracts amid plunging demand from the global construction and automobile industry. (See: ArcelorMittal reports first ever loss of $2.63 billion)