ArcelorMittal Extends Conversion Date For $1 Billion In Convertible Bonds

By Alex MacDonald

LONDON--Steel titan ArcelorMittal (MT) said Thursday it has extended the conversion date for $1 billion in privately placed mandatory convertible bonds that were issued to a unit of Credit Agricole S.A. (ACA.FR) and which isn't listed.

The steelmaker is seeking an extension as it grapples with lower profitability due to anemic demand for its steel products, particularly in Europe.

ArcelorMittal is cutting costs and selling non-core assets in order to reduce net debt following credit downgrades by two large credit rating companies, one of which said the steelmaker could potentially breach a debt covenant in June 2013 unless it significantly reduces its debt or raises its profits to cover its debt obligations.

The conversion date on the bond that was issued in 2009 has now been extended to Jan 31, 2014, the company said. The other main features of the bond remain the same, it added.

The Luxembourg unit of ArcelorMittal which was responsible for the bond issuance also said it has extended the notes linked to shares of listed companies Eregli Demir ve Celik Fabrikalari T.A.S.(EREGL.IS) or Erdemir of Turkey and China Oriental Group Co. Ltd. (0581.HK). ArcelorMittal owns shares in both the companies and used proceeds from the convertible bond issuance to invest in the notes linked to those shares.

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