Steel giant ArcelorMittal (MT) announced that it has completed the sale of 15% interest in its fully-owned subsidiary ArcelorMittal Mines, Canada (AMMCF) to a consortium led by POSCO (PKX) and China Steel Corporation for $1.1 billion.
The sale was a part of the previously announced agreement, pursuant to which ArcelorMittal’s unit AMMC and the consortium entered into a joint venture partnership. Under the deal, the partnership will own ArcelorMittal’s Labrador Trough iron ore mining and infrastructure assets.
The consortium acquired a 3.95% interest in the joint venture for a total consideration of $290 million in cash, which increased its stake to 15% in the joint venture. AMMC now retains 85% stake in the joint venture.
A few days ago, ArcelorMittal posted a net loss of $0.3 billion or 21 cents per share for the first quarter of 2013 compared with a net income of $92 million or 6 cents per share a year ago. Analysts polled by Zacks were expecting earnings of 7 cents a share on an average for the quarter. Challenging economic conditions, especially in Europe, weighed on the bottom line in the quarter.
Revenues declined 13% year over year to $19.8 billion in the reported quarter. Sales increased 2.3% on a sequential basis due to higher steel shipment volumes. Shipments declined 5.9% year over year to 20.9 million metric tons in the quarter.
ArcelorMittal retained its outlook for 2013 and expects to report earnings before interest, tax, depreciation and amortization (:EBITDA) above $7.1 billion assuming that the prices of iron ore and the margin of steel prices over raw material costs in 2013 will be similar to the 2012 levels.
ArcelorMittal currently retains Zacks Rank #4 (Sell).
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