Billionaire Lakshmi Mittal-led ArcelorMittal on Friday said it will raise $3 billion (Rs 20,298 crore) from investors and sell $1 billion (Rs 6,766 crore) stake in Spanish auto-part maker Gestamp, to reduce debt after the losses widened 7-fold in 2015 to $7.9 billion (Rs 53,451.4 crore).
The world’s largest steel-maker outlined a plan to reduce its $15.7 billion (Rs 1.06 lakh crore) net debt by nearly a quarter.
Mittal, who owns about 37% of ArcelorMittal, will maintain his stake and will sign up to its entitlement of the share issue, worth about $1.1 billion (Rs 7,442.6 crore).
Lakshmi Mittal’s ArcelorMittal mothballs Spanish steel plant, lay off workers
Continuing to suffer from the Chinese industry’s overcapacity that has driven down world prices, the company reported net sales declining to $63.58 billion (Rs 4.30 lakh crore) in 2015 against $72.28 billion (Rs 4.89 lakh crore) in 2014.
Net loss reported $7.9 billion was mostly because of $4.8 billion (Rs 32,476.8 crore) write-downs on the iron ore mining business and a $1.3 billion (Rs 8,795.8 crore) charge on inventory due to the global steel price plunge. A year earlier the group made a loss of $1.1 billion (Rs 7,442.6 crore).
ArcelorMittal-SAIL Rs 5000-crore JV project likely to finalise in 2016: Steel Ministry
The firm reported a widening of its net loss to $6.69 billion in the December quarter against a net loss of $955 million in the year-ago period as it faced a “very difficult” 2015, which witnessed iron ore and steel prices slide further.
The Luxembourg-headquartered company’s revenue fell by 25% to $13.98 billion in the October-December quarter of 2015, from $18.72 billion in the same quarter of 2014 fiscal. The firm follows January-December as its fiscal year.
ArcelorMittal Europe reports Q3 loss of 23 million euro
On the impairment charges, the firm said, “FY 2015 net loss of $7.9 billion including $4.8 billion of impairments (primarily due to mining impairments).
“And $1.4 billion of exceptional charges (primarily related to the write-down of inventory following the rapid decline of international steel prices).”
Breaking down the impairment charges, ArcelorMittal said the mining segment hit of $3.4 billion consists of $0.9 billion with respect to goodwill.
Besides, $2.5 billion related to fixed assets mainly due to a downward revision of cash flow projections relating to expected persistence of a lower raw material price outlook at ArcelorMittal Liberia ($1.4 billion), Las Truchas Mexico ($0.2 billion), ArcelorMittal Serra Azul in Brazil ($0.2 billion) and ArcelorMittal Princeton coal mining operations in the US ($0.7 billion).
While, steel segments’ hit of $1.4 billion consists of fixed asset impairment charges of $0.2 billion on intended sale of the Long Carbon facilities in the US (ArcelorMittal La Place, Steelton and Vinton within the NAFTA segment).
It also includes $0.4 billion primarily in connection with idling for an indefinite time of the ArcelorMittal Sestao plant in Spain (Europe segment) and $0.8 billion related to NAFTA: Deployment of asset optimisation programs at Indiana Harbor East and West in the US ($0.3 billion).