Steel Maker Making Moves
January 9, 2013 by Paul Ausick
The re-start of the blast furnace is attributed to a slight increase in demand from European customers. The furnace was shut down last April for maintenance and never re-started. The company invested about $10.5 million in the furnace during the shutdown. This is good news.
Proceeds from the stock and note issuance will be used to reduce the company’s net debt. At the end of 2012, ArcelorMittal expects to report net debt of about $22 billion. The company hopes to lower that total to $17 billion by the end of June 2013, with an ultimate target of $15 billion in debt.
The dollar amount of the offer for the Alabama steel mill was not disclosed, but a report at MarketWatch estimated that the mill is worth €1.5 to €2 billion (about $1.96 to $2.6 billion). ArcelorMittal noted that if it wins the bidding for the Alabama mill it can still meet its $17 billion debt target.
Investors, apparently, aren’t so sure about all this. The company’s shares are down 4.2% today, at $16.79 in a 52-week range of $13.28 to $23.62.
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