ArcelorMittal MT has declared the successful completion of its $3 billion rights issue. Through the exercise of primary subscription rights, 229,905,208 new shares were subscribed representing a subscription rate of 97.4%.
There was an oversubscription demand for 372,398,986 shares, representing 11.5 times the number of surplus shares available after satisfaction of the primary subscription rights, which will consequently be satisfied only in part, for 32,446,323 new shares. Surplus shares will be allocated to holders that submitted oversubscription requests on a pro-rata basis, in proportion to the number of rights exercised by each holder (excluding the oversubscription). In each case, the allocated amount will not exceed the maximum number of additional new shares requested.
The total shares subscribed, including oversubscription, were 1,602,304,194, representing a total subscription rate of 126.9%.
ArcelorMittal plans to use the net proceeds of the rights issue to reduce its debt and strengthen its balance sheet.
The new shares are expected to start trading on the European stock exchanges on April 8, 2016 and on the NYSE on April 11.
ArcelorMittal posted a net loss of $6.7 billion or $3.72 per share in fourth-quarter 2015 compared with a net loss of $711 million or 40 cents per share in the year-ago quarter. The bottom line was hit by hefty impairment charges (of $4.7 billion) and lower iron ore and steel prices.
Adjusted net loss for the quarter was $0.4 billion. In the year-ago quarter, the company had recorded adjusted net income of $0.1 billion. Adjusted loss of 20 cents per share for the reported quarter was narrower than the Zacks Consensus Estimate of a loss of 26 cents.
ArcelorMittal’s net loss in 2015 was $7.9 billion, or $4.43 per share, compared with a net loss of $1.1 billion, or 61 cents per share in 2014. Adjusted net loss for the full year was $0.3 billion. In 2014, the company had reported adjusted net income of $0.4 billion.
ArcelorMittal currently has a Zacks Rank #4 (Sell).
Better-ranked companies in the basic materials sector include Companhia Siderurgica Nacional SID, Fortuna Silver Mines Inc. FSM and TimkenSteel Corporation TMST. Each of these stocks hold a Zacks Rank #2 (Buy).