ArcelorMittal's $3 billion rights issue likely to open on March 14

ArcelorMittal's $3 billion rights issue is expected to open on March 14 as the steel giant tries to reduce debt after its losses widened seven-fold in 2015 to $7.9 billion.

Last month, the Luxembourg-headquartered steelmaker had announced plans to reduce its $15.7 billion net debt by nearly a quarter.

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"Record date for ArcelorMittal shares is expected to be on March 14, 2016, at the close of business on each applicable market where the shares are traded," the firm said in a regulatory filing.

Each record holder of ArcelorMittal shares will be allocated one right per existing ArcelorMittal share held as of such record date, it added.

On February 5, 2016, the firm had announced a proposed capital raise by way of rights offering where its existing shareholders will be granted preferential rights to subscribe for ArcelorMittal ordinary shares.

It expects to issue a number of new ordinary shares in the rights offering that will allow it to raise approximately $3 billion.

An extraordinary general shareholders meeting has been called on March 10, 2016, to consider, among other things, the increase in ArcelorMittal's authorised share capital, necessary to permit the launch of the proposed rights offering, it said.

The launch of rights offering is also subject to approval by Luxembourg supervisory authority for the financial sector (Commission de Surveillance du Secteur Financier) as well as market and other conditions, ArcelorMittal said.

The world's largest steelmaker, which continued to suffer from Chinese industry's overcapacity that has driven the world prices down, reported a decline in net sales at $63.58 billion in 2015 against $72.28 billion in 2014.

Its net loss at $7.9 billion in 2015 was mostly due to $4.8 billion write-downs on the iron ore mining business and a $1.3 billion charge on inventory owing to the global steel price plunge. A year earlier the group made a loss of $1.1 billion.

Besides the rights offer, ArcelorMittal will also sell almost $1 billion worth stake in Spanish auto-part maker Gestamp.

That apart, billionaire Lakshmi Mittal, who owns about 37% of ArcelorMittal, will maintain his stake and will sign up to its entitlement of the share issue, worth about USD 1.1 billion.

It has also announced a 5-year strategic road map, the ArcelorMittal Action 2020 plan, that sets improvement plans for each of its five business segments and aims to improve EBITDA and free cash flow performance.