ArcelorMittal refinances $1.2 bn debt until 2012

BRUSSELS: The world's largest steelmaker ArcelorMittal SA said on Thursday it has refinanced $1.2 billion of debt until 2012, as it struggles with loans amid its first quarterly loss and plunging demand for steel. The company said it extended credit lines until 2012 for debt due in 2010 and 2011.

It is also selling euro1.25 billion ($1.65 billion) in bonds���more than originally planned���to help pay off debt. It said there was strong demand for the corporate bonds, a tough market in recent months as investors have been afraid companies might default on loans.

ArcelorMittal had net debt of $26.5 billion at the end of last year, a massive burden it accumulated from a recent expansion program and Mittal Steel Co.'s 2006 takeover of Arcelor which formed the company.

ArcelorMittal���which makes some 10 per cent of global steel���posted its first quarterly loss in the last three months of 2008 as demand from car makers and construction plunged.

It is stepping up cutbacks as it tries to pay off $10 billion in debt by the end of this year. The company has sharply reduced output, shuttered plants and laid off temporary staff. Some 9,000 workers have also been offered voluntary redundancy.

CEO Lakshmi Mittal warned last month that it could take up to two and a half years for the steel market to bounce back. He forecast worldwide demand to fall between 7 and 10 per cent this year.