ArcelorMittal, controlled by the Mittal family, has raised $4 billion (€3 billion) through a recent stock offering to tackle its debt issues, prompting some to say the family is diluting its ownership of the world’s biggest steel-maker.
ArcelorMittal has not yet published the exact percentage of the company that the family will own since the deal has been revalued, but analysts say the offering would have inevitably diluted the family's ownership. “There would have been some dilution of ownership with this offering,” said a London-based family business expert.
A spokesman for company said the original offering of $3.5 billion would have seen the Mittal family’s ownership diluted to 38% from 41%. The spokesman wasn’t able to confirm the ownership percentages with the new offering figure.
The Mittals have placed an order for $600 million-worth of the offering’s new shares.
The stock offering announcement follows the general downturn in the global steel industry, as well as the Mittal family’s high-profile dispute with the French government over the profitability of one of ArcelorMittal’s French operations.
The offering, along with the company’s other initiatives, should allow the company to reduce its net debt to approximately $17 billion by June 30, putting the company on track to achieve its medium-term net debt target of $15 billion.
Lakshmi Mittal, chairman and CEO, said in a statement: “We have consistently said that reducing net debt is a priority for the company. The transaction, supplemented by proceeds from ongoing asset disposals, the announced reduction in dividends and the continued saving initiatives, will significantly lower our net debt.”