ArcelorMittal SA plans to raise R3.5bn in debt

Johannesburg - ArcelorMittal South Africa is in talks to borrow R3.5bn ($250m) as part of a capital raising plan, the country’s biggest steelmaker said on Thursday.

The company didn’t specify what the funds would be used for, but has said previously it wants to refurbish existing facilities including its Saldhana works in the Western Cape, and that an environmental clean-up will require investment. The Vanderbijlpark-based steelmaker lowered its net debt to R290m at the end of last year after raising R4.5bn in a rights issue.

“ArcelorMittal is in the process of raising funds via a borrowing based facility to the value of R3.5bn as part of a capital raising for the entire business,” the company said in an emailed response to questions.

Like many steelmakers around the world, ArcelorMittal South Africa has been hurt by cheap Chinese imports and rising costs, and hasn’t made an annual profit since 2010.

The company has pledged to limit job cuts, increase black ownership and invest in supply in return for the government increasing tariffs on imports and committing to buying local steel in infrastructure projects.