The world's largest steelmaker Luxembourg-based ArcelorMittal has announced that its board of directors has decided to proceed with the widely expected spin-off of its stainless steel business which it believes will maximize value for shareholders.
Accordingly, in the first quarter of 2011, shares in the stainless steel business will be distributed to shareholders, who would receive one stainless steel business share for every twenty ArcelorMittal shares held on the date of record.
ArcelorMittal expects the spin-off to result in a non-cash impairment charge of about $800 million.
Following the spin-off, the stainless steel business will have approximately $1 billion of net financial debt, although the transaction will not affect ArcelorMittal's net debt to EBITDA leverage ratio, said the company in its statement.