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The Company retains the flexibility to adjust the relative proportions of MCNs and common stock offered in the Combined Offering.
The common stock and MCNs will be offered inside the United States pursuant to a registration statement filed with the Securities and Exchange Commission (the "SEC") and globally, subject to certain customary selling restrictions.
ArcelorMittal intends to use the net proceeds from the Combined Offering to reduce existing indebtedness. Deleveraging remains a priority for ArcelorMittal to retain strategic flexibility, and this offering, together with other initiatives, is expected to enable the Company to reduce its net debt down to approximately USD 17 billion by June 30, 2013 and accelerate the achievement of a medium term net debt target of USD15 billion.
ArcelorMittal reiterates its guidance for the full year 2012. The Company expects to achieve FY 2012 EBITDA of approximately USD 7 billion and net debt is expected to be approximately USD 22 billion as of year end 2012.
Lakshmi Mittal, Chairman and CEO of ArcelorMittal, commented: "We have consistently said that reducing net debt is a priority for the company. This transaction, supplemented by proceeds from ongoing asset disposals, the announced reduction in dividends and continued cost saving initiatives, will significantly lower our net debt and accelerate the achievement of a medium term net debt target of USD 15 billion."
The MCNs will have a maturity of 3 years, will be issued at 100% of the principal amount and will be mandatorily converted into ordinary shares of ArcelorMittal (the "Shares") at the maturity of the MCNs unless earlier converted at the option of the holders or ArcelorMittal or upon certain specified events in accordance with the terms of the MCNs. The MCNs are expected to pay a coupon in the range between 5.875% and 6.375% per annum, payable quarterly in arrears. The minimum conversion price of the MCNs will be equal to the share reference price, determined by the placement price of shares in the concurrent common stock offering as described below, and the maximum conversion price is expected to be set in the range between 120% and 125% of the minimum conversion price.
Goldman Sachs & Co will be the sole global coordinator of the Combined Offering, and Goldman Sachs & Co, BofA Merrill Lynch, Credit Agricole Corporate and Investment Bank, and Deutsche Bank AG, London Branch will serve as joint bookrunners of the Combined Offering.
The shares of common stock will be offered with preferential allocations to existing shareholders. The Mittal family has indicated its intention to participate by placing an order in the Combined Offering for an aggregate amount of USD 600 million, and will be locked up for a period of 180 days.
Under the terms of the Combined Offerings, there will be a 180-day lock-up period for the Company on issuances or sales of Shares and securities that give the holder the right to acquire Shares.
The offering of the MCNs and the Shares will be made under ArcelorMittal's shelf registration statement filed with the SEC on February 28, 2012, as amended by a post-effective amendment filed on January 9, 2013. The final terms of the MCNs and the concurrent equity offering are expected to be announced on January 9, 2013 in a separate press release. Settlement of the common stock offering is expected to occur on or around January 14, 2013. Settlement of the MCNs is expected to occur on or around January 16, 2013. ArcelorMittal will apply to list the MCNs on the New York Stock Exchange ("NYSE"), subject to satisfaction of the NYSE's minimum equity listing standards with respect to the MCNs. There can be no assurance that such requirement will be satisfied. If the MCNs are approved for listing, ArcelorMittal expects trading on the NYSE to begin within 30 calendar days after the MCNs are first issued.
ArcelorMittal management will host a conference call for members of the investment community at: