What Is The Potential Impact Of ArcelorMittal’s Recent Transactions Aimed At Debt Reduction?

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Arcelor Mittal

With the steel industry characterized by weak demand and pricing, ArcelorMittal – the world’s largest steelmaker – has prioritized shoring up its balance sheet through debt reduction. The company has earmarked the proceeds of recently announced transactions such as a stake sale in Gestamp Automocion ( a Spanish automotive components maker) and a $3 billion Dollar rights issue for debt reduction. With the company set to meet its capital spending and working capital needs for the year through cash flow from operations (as per our estimates), if the company uses the proceeds of the aforementioned transactions for debt reduction, it could lower its total outstanding debt by around 20% by year end.

MT Debt Reduction 2016

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ArcelorMittal

 

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