Arrium Limited (ASX:ARI) has launched a $754 million capital raising to repay debt and strengthen its balance sheet.
The mining and materials company will seek to raise about $656 million through a fully underwritten, one-for-one renounceable entitlement offer with retail entitlements. Arrium also expects a placement to institutional investors to raise a minimum of $98 million.
Chairman Peter Smedley says with iron ore prices at five year lows there is increased uncertainty over the extent and timing of recovery.
Mr Smedley believes the capital raising positions Arrium for current markets and reduces the company’s debt significantly in a single step.
Arrium rebounded to a full year profit of $207 million in the 2014 financial year.
