MT ArcelorMittal

By Alex MacDonald

LONDON--Shareholders of steel giant ArcelorMittal (MT) will derive better value from a rights issue than if the company sold assets as the supply and demand dynamics in the global steel market begin to improve, said the company's Chief Financial Officer Aditya Mittal.

"We have to make sure we don't destroy value" through asset sales, Mr. Mittal told reporters. "The best value decision [is] a rights issue," he said.

ArcelorMittal on Friday announced plans to raise $3 billion through an equity issue plus another $1 billion from the sale of its 35% stake in Spain's automotive steel component firm Gestamp. This should reduce net debt to less than $12 billion compared with its previous medium-term net debt target of $15 billion and net debt of $15.7 billion at the end of December.

Mr. Mittal said "the most difficult period of the steel prices and costs were reached towards the end of 2015." He expects steel prices to rise, buoyed by trade action in the U.S. Europe and elsewhere against a surge in steel imports from China. Global steel demand should remain broadly flat compared with its 2.2% contraction last year, the company said.

-Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

February 05, 2016 03:53 ET (08:53 GMT)

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