ArcelorMittal says U.S. buy won't impact $15 billion debt target

BRUSSELS Sun Dec 1, 2013 10:29am EST

1 of 8. A worker controls the temperature of a casting roller at ThyssenKrupp Steel Europe AG in Duisburg November 29, 2013.

Credit: Reuters/Ina Fassbender

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BRUSSELS (Reuters) - ArcelorMittal's (ISPA.AS) acquisition of a U.S. plant jointly with Nippon Steel & Sumitomo Metal Corp (5401.T) will not affect the world No. 1 steelmaker's debt targets, ArcelorMittal's chief executive said on Sunday.

ArcelorMittal unveiled the $1.55 billion takeover of ThyssenKrupp's (TKAG.DE) U.S. steel finishing plant in Calvert, Alabama, on Friday, saying it would finance the deal via equity and debt at the joint venture level.

ArcelorMittal Chief Executive Lakshmi Mittal told reporters on a conference call the deal would have a minimal impact on this year's debt and no effect on its medium term debt target.

The company estimates net debt of $17 billion by the end of 2013, falling to $15 billion in the medium term.

Chief Financial Officer Aditya Mittal said ArcelorMittal and Nippon would split the equity cost of the deal.

"The ratio of debt to equity is 2 to 1 which implies $1 billion of debt on the joint venture. As it is a $1.55 billion deal, it's $258 million of equity financing for ArcelorMittal," he said.

He said the equity financing and the debt of the joint venture would not be consolidated in ArcelorMittal's balance sheet.

Lakshmi Mittal said he did not see any U.S. antitrust issues.

"We do not anticipate major problems from the antitrust authorities, the Department of Justice, the Department of Commerce," he said.

He also repeated his forecast for global steel consumption growth of 3-3.5 percent this year, saying the U.S. steel market had bounced back to its pre-crisis level while the European market continued to be weak.

(Reporting by Foo Yun Chee; Editing by Mark Potter)

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