ArcelorMittal, the worlds largest steelmaker, will issue $3.5 billion of shares and convertible notes to sharply reduce the heavy debts that led to a cut in its credit rating to “junk” status.

The company said yesterday the issue, the exact make-up of which is yet to be determined, would help to reduce its net debt to about $17 billion by the end of June from an expected $22 billion at the end of 2012.

It would also reduce the need for further large disposals.

“We are parking the balance sheet issue now.

“We are also parking to some degree the asset divestment process,” chief financial officer Aditya Mittal told a conference call.

He also confirmed ArcelorMittal had bid for assets German rival ThyssenKrupp has put up for sale.

– (Bloomberg)