NEW YORK An ArcelorMittal
SA executive confirmed the companys interest in
ThyssenKrupp AGs Calvert, Ala., facility during a
conference call with investors addressing the companys
capital-raising and debt-reduction targets.
The Luxembourg-based steelmaker
announced a plan to raise $3.5 billion in capital through a
combined offering of common stock and convertible notes on the
call Wednesday morning. That offering and select divestitures
from the companys Mines Canada and Kalagadi Manganese
assets are parts of an initiative to cut the companys
debt to $17 billion by June 30 from $22 billion as of Dec.
The plan also includes a bid for
ThyssenKrupps Calvert facility, chief financial officer
Aditya Mittal said when asked about ArcelorMittals
interest in the ThyssenKrupp assets.
"In terms of (ThyssenKrupp)
Alabama, I think its clearly a world-class asset and
would end up serving the highest segments in the North American
market," Mittal said. "We do believe there are synergies with
our existing operations, and we believe we have structured a
bid which will allow us to participate ... (and) not detract us
from achieving a net debt target of $17 billion."
That plan doesnt leave
room for a high bid for the ThyssenKrupp facility, analysts
told AMM. One analyst described ThyssenKrupp as a
"side note" to ArcelorMittals debt reduction plan.
Analysts said the bid would need
to be about $1 billion to make the $17-billion target
"When I look around and try to
figure out who is a logical buyer, the one name that comes up
is ArcelorMittal, because to run that plant in Alabama, you
have to have slabs," Charles Bradford, president of New
York-based Bradford Research Inc., said. "If they could get a
price of $1 billion, they could do it."
A third analyst expressed
uncertainty about the seriousness of ArcelorMittals
interest. "I think they are trying to keep their options open,"
Bridget Freas, a senior analyst at Chicago-based Morningstar
Inc., told AMM. "It would be hard for them to hit that
target if they are going to be shelling out (for) the Alabama
facility," she added, although she said she wouldnt rule
Whether Essen, Germany-based
ThyssenKrupp would be willing to take a bid as low as $1
billion for the facility remains to be seen, analysts said.
Another option that might make
sense would be a partnership, Bradford noted, cautioning,
however, that antitrust issues would likely be a hurdle for
ArcelorMittal were it to add Calvert to its U.S. flat-rolled