Steel giant, ArcelorMittal MT announced that it has entered into a deal to divest its LaPlace and Vinton Long Carbon facilities in the U.S. to an affiliate of Black Diamond Capital Management. The terms of the transaction remained undisclosed.
The sale is in sync with the company’s strategy to selectively divest non-core assets. The transaction, which is subject to customary closing conditions, is expected to complete in Apr 2016.
The LaPlace, LA, facility, along with a rolling mill in Harriman, TN, makes billets, angles, flats, channels and beams. The Vinton facility produces rebar and grinding media.
ArcelorMittal also entered into a transition services agreement with Black Diamond, in order to ensure a smooth transition period and see that there is no business disruption.
ArcelorMittal’s shares rose roughly 2% to close at $4.26 on Mar 24.
ArcelorMittal posted a net loss of $6.7 billion or $3.72 per share in fourth-quarter 2015 compared with a net loss of $711 million or 40 cents per share in the year-ago quarter. The bottom line was hit by hefty impairment charges (of $4.7 billion) and lower iron ore and steel prices.
Adjusted net loss for the quarter was $0.4 billion. In the year-ago quarter, the company had recorded adjusted net income of $0.1 billion. Adjusted loss of 20 cents per share for the reported quarter was narrower than the Zacks Consensus Estimate of a loss of 26 cents.
ArcelorMittal’s net loss for 2015 was $7.9 billion, or $4.43 per share, compared with a net loss of $1.1 billion, or 61 cents per share in 2014. Adjusted net loss for the full year was $0.3 billion. In 2014, the company had reported adjusted net income of $0.4 billion.
ArcelorMittal currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials sector include Usinas Siderurgicas de Minas Gerais S.A. USNZY, AK Steel Holding Corporation AKS and Schnitzer Steel Industries, Inc. SCHN. Each of these stocks holds a Zacks Rank #2 (Buy).
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