ArcelorMittal S Africa Plans to Raise Up to $327 Million Via Equity Issue

By Alex MacDonald

LONDON--ArcelorMittal South Africa Ltd (ACL.JO) said Friday it plans to raise between 4 billion to 4.5 billion South African rand ($287 million to $323 million) via an equity issue in order to pay down debt and fund its capital expenditure.

South Africa's largest steelmaker, which is 47% owned by Luxembourg-based ArcelorMittal (MT), is restructuring its operations after suffering four consecutive years of net losses and suffering a decline in local steel consumption over the past two years.

The company has been hit by cheap steel imports as China--the world's largest steel-producing nation--continues to ramp up steel-production capacity amid waning domestic demand at home, and subdued steel demand globally. Meanwhile labor and energy costs in South Africa have risen above inflation rates over the past few years.

The parent company ArcelorMittal said it will fully underwrite the share issue. The company plans to issue more details about the rights issue in January before being put to a shareholder vote.

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(END) Dow Jones Newswires

November 06, 2015 03:06 ET (08:06 GMT)

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