Luxembourg-headquartered global steel giant
ArcelorMittal has announced that it has completed the sale of 134,317,503 shares and an equal number of warrants linked to these shares in
Turkey-based integrated steelmaker Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (
Erdemir). The sale raised TRY 478.2 million ($267.5 million).
The share sale has resulted in
ArcelorMittal's stake in
Erdemir declining to 18.7 percent from approximately 25 percent. The company's stake in
Erdemir will decrease to approximately 12.5 percent if all of the warrants are exercised.
"
Erdemir is a strong business with excellent prospects. However, our stake has always been non-core as we have never exercised any control. So this decision is very much in line with our declared group strategy of focusing on core assets and reducing net debt", said Aditya Mittal, CFO and member of the Group Management Board for
ArcelorMittal. He added, "The shares freed up by this transaction will improve
Erdemir's liquidity and attract a wider range of investors."
ArcelorMittal has also agreed to a one year lock-up period that prevents the company from selling its remaining stake in
Erdemir.
In 2011,
Erdemir reported a record net profit of TRY 1 billion ($560 million), while the sales revenues of the company increased by 34 percent year on year to TRY 8.92 billion ($4.9 billion).