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Steel firm to issue bonds to pay debt

ARCELORMITTAL SA, the world's largest steel maker, said yesterday it would raise 2.5 billion euros (US$3.49 billion) by selling bonds to extend and refinance debt.

The company has reported large losses in its last two quarters as the global economic downturn caused demand to plummet for steel used to construct buildings, bridges, cars and machinery.

That has hurt its ability to pay off a massive debt burden - US$26.7 billion on March 31 - and led to share and bond issues as it seeks to repay US$10 billion in debt this year.

The debt comes from an aggressive expansion program in recent years as well as the cost of Mittal Steel Co's 30-billion-euro takeover bid for Arcelor that formed the company in 2006.

Trimming costs

Earlier this month ArcelorMittal announced it would sell bonds to raise US$2.25 billion. In April it issued US$3 billion in new shares and sold another US$1.25 billion in bonds.

It also plans to trim running costs by US$2 billion and says it has saved US$6 billion by halving output in the first quarter - and will save more than US$7.5 billion in the second quarter.


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