7 March 2019: ArcelorMittal has said it has completed the pricing of its bond issue that will be used for repayment of existing debt including $1-billion outstanding under a $7-billion term facility it recently entered into for acquisition of Essar Steel through a joint venture with Nippon Steel Sumitomo Metal Corporation (NSSMC). The company had on Wednesday announced the launch of an offering of USD-denominated notes.
In a statement issued on Thursday, the company said it has completed the pricing of its offering of US$750,000,000 aggregate principal amount of its 4.550% notes due in 2026.
“The proceeds to ArcelorMittal (before expenses), amounting to approximately $745 million, will be applied towards repayment of existing debt including the $1 billion outstanding under a $7 billion term facilities agreement entered into in connection with the proposed acquisition of Essar Steel India Limited through a joint venture with Nippon Steel and Sumitomo Metal Corporation.” the statement added.
The offering is scheduled to close on 11 March, 2019, subject to satisfaction of customary conditions.
The joint venture agreements provide that ArcelorMittal and NSSMC will own 60% and 40%, respectively, of the joint venture’s share capital and will have equal representation and voting rights on its board of directors, such that the joint venture will be considered by the parties to be a jointly controlled entity, an official statement announcing the launch of the USD notes. ArcelorMittal also said it anticipates that its investment in the joint venture will be equity accounted.
ArcelorMittal, which has submitted a Rs 42,000 crore resolution plan for Essar Steel, has said is hopeful of getting NCLT nod to acquire Essar Steel India Ltd (ESIL) by the first quarter of 2019. It also informed shareholders that it entered into a $7 billion term facilities agreement with a group of lenders in connection with the acquisition of ESIL which has a one-year term valid till November 2019.
In 2018, ArcelorMittal had revenues of $76 billion and crude steel production of 92.5 million tonnes, while produced 58.5 million tonne of iron ore on its own.
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