ArcelorMittal unit sells $750-m convertible bonds

Written by Agencies | Updated: Dec 30 2009, 05:49am hrs
ArcelorMittal, the worlds largest steelmaker, said on Tuesday one of its units sold a $750 million convertible bonds to fund an investment in Turkeys Eregli Demir & Celik Fabrikalari and Australias Macarthur Coal Ltd. The bonds, maturing in 17 months and convertible into shares of the unit, was placed with a Luxembourg-based affiliate of Calyon, the steel producer said in a statement on Tuesday.

ArcelorMittal raised $11.4 billion in the second quarter to speed up a debt-reduction plan and in July renegotiated banking covenants on about $32 billion of financing. The company will use the convertible bonds to invest in notes linked to shares of the Turkish steelmaker, known as Erdemir, and Macarthur Coal.

Luxembourg-based ArcelorMittal said it doesnt plan to sell shareholdings in Erdemir or Macarthur. The company raised its stake in the Turkish producer to 25% last year. It also owns 17%of Macarthur, according to data compiled by Bloomberg. Net debt was $21.6 billion as of September 30.

ArcelorMittal rose 12.5 cents, or 0.4%, to 32.175 euros in Amsterdam trading, valuing the company at 50 billion euros ($72 billion).

The company added that the subsidiary may also invest in other financial instruments in consultation with investment banker.