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ArcelorMittal to raise $3bn as it swings to loss

ArcelorMittal, the world's biggest steel maker, has revealed plans to raise $3bn (£2bn) as it looks to bolster its balance sheet and slash debts.

This comes on the same day the group announced it had swung to a $1bn loss in the first quarter, as the economic crisis has caused metal prices to slump and demand to collapse.

The lion's share of the capital raising – about $2.5bn – is to be carried out via a rights issue, with the rest through a sale of convertible bonds.

The group, run by Britain's richest man, Lakshmi Mittal, is determined to pay down debts. Net debts currently stand at $26.7bn, and the company has pledged to pay off $10bn this year. The Mittal family, which owns 43 per cent of the company, said that it would subscribe for at least 10 per cent of the offering.

ArcelorMittal announced yesterday that it had swung from a $2.37bn profit in the first three months of 2008 to a $1.06bn loss in the first quarter of this year. Mr Mittal said: "Although market conditions remain challenging, a technical recovery is inevitable."