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ArcelorMittal Proceeds with Spin-off of Stainless Steel Business
12/09/2010 - The Board of ArcelorMittal has concluded the assessment of a potential spin-off of the stainless steel business and has decided to proceed with the spin-off. Subject to shareholder approval, shares in the stainless steel business will be distributed in the first quarter of 2011.
The Board of ArcelorMittal has concluded the assessment of a potential spin-off of the stainless steel business and has decided to proceed with the spin-off. Subject to shareholder approval, shares in the stainless steel business will be distributed to shareholders in the first quarter of 2011.
Shareholders will receive one stainless steel business share for every 20 ArcelorMittal shares held on the record date. Stainless steel business shares will be listed on Euronext Paris, Amsterdam, and in Luxembourg. In the United States, they will trade on the over-the-counter market in the form of NY Registry Shares.
A prospectus describing the stainless steel business and transaction will be published later this month, according to ArcelorMittal.
The company expects the spin-off to result in a non-cash impairment charge of approximately $800 million as the stainless steel business will be accounted for in accordance with IFRS 5 applicable to assets held for distribution. The final impairment charge will be assessed by ArcelorMittal and reviewed by its auditors at year-end.
Following the spin-off, the stainless steel business will have approximately $1 billion of net financial debt, which will comprise a combination of existing ArcelorMittal debt transferring with the stainless steel business and new debt raised by this business. As a result, the company expects the transaction to be broadly neutral to ArcelorMittal’s net debt to EBITDA leverage ratio.
ArcelorMittal is the world's leading steel company, with operations in more than 60 countries. It is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in more than 20 countries spanning four continents, the company covers all of the key steel markets, from emerging to mature. In 2009, ArcelorMittal had crude steel production of 73.2 million tonnes, representing approximately 8% of world steel output.
