By Alex MacDonald
LONDON--Steel titan ArcelorMittal (MT) aims to maintain its
investment-grade credit rating but won't do so at all costs, its
chief financial officer said Wednesday.
"It is important to maintain investment-grade credit rating,
but...it is not imperative either," Aditya Mittal told journalists
in a conference call. "We need to balance [the needs of] all of our
stakeholders."
He later told analysts that the steelmaker wouldn't maintain an
investment credit rating at all costs.
The latter comment was made in response to an analyst query over
the degree to which the steelmaker would endeavour to meet Moody's
Investors Service's debt reduction targets if the credit rating
company were to require even more debt cuts.
Moody's downgraded the company's credit rating outlook to
negative from stable in August and called upon the company to
reduce its net debt by $5 billion over a six-month period. It said
at the time that further debt reduction would be necessary in order
to maintain a Baa3 rating should ArcelorMittal's annually adjusted
earnings before interest, taxes, depreciation and amortization or
Ebitda fall below $7.5 billion. Moody's had forecast at the time an
adjusted Ebitda of $7.8 billion for 2012.
ArcelorMittal on Wednesday guided analysts toward a 2012 Ebitda
target of about $7 billion. It also reported that net debt has
increased to $23.2 billion at the end of the third quarter but is
forecast to fall back to $22 billion at the end of the year due to
a seasonal downturn in working capital requirements.
ArcelorMittal is currently seeking to reduce net debt in order
to maintain an investment-grade credit rating after Standard and
Poors downgraded the company's credit rating to junk status over
the summer. Fitch Ratings also downgraded the company's credit
rating by one notch over the summer to just a notch above junk
status.
Mr. Mittal didn't disclose its net debt target or the timetable
for divesting more non-core assets, but he said the near $1 billion
in cash savings that its expects to derive from its decision to
slash next year's annual dividend would feed into Moody's credit
ratings review. He also said the company was in discussions with
various parties about selling more non-core assets.
The company has sold $2.7 billion in non-core assets since
September 2011.
Write to Alex MacDonald at alex.macdonald@dowjones.com
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