ArcelorMittal to sell $1.1billion stake in Canadian unit
By Joyce Lee and Robert-Jan Bartunek
SEOUL/BRUSSELS (Reuters) - ArcelorMittal (ISPA.AS: Quote), the world's biggest steelmaker, will sell a 15 percent stake in one of its Canadian iron ore operations, raising $1.1 billion to help pay off debt at a time of sluggish demand.
The group, which makes about 6-7 percent of the world's steel, will sell the stake in ArcelorMittal Mines Canada to a consortium including South Korean steelmaker POSCO (005490.KS: Quote) and Taiwan-listed China Steel 2002.TW, it said on Wednesday.
It is the latest in a series of steps to raise funds as slow global economic growth and spending cuts in Europe dampen demand for steel used in the car and construction industry.
"It's one of the more readily disposable parts of the business, and given they need to reduce debt I don't think it's a massive surprise they are selling it," said Nomura analyst Neil Sampat.
ArcelorMittal wrote down the value of its European business by $4.3 billion last month and has had its credit rating cut to non-investment grade by all credit rating agencies.
Its net debt rose by $1.2 billion during the third quarter to $23.2 billion at the end of September.
The World Steel Association in October forecast steel demand would rise 2.1 percent in 2012, down from 6.2 percent in 2011.
ArcelorMittal Mines Canada operates two large open-pit mines in the province of Quebec, where it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping. Continued...