Nippon Steel is set to divest at least 30 billion yen ($211 million) in assets this fiscal year to manage its debt, as the company awaits the outcome of its $14.9 billion bid for U.S. Steel, according to the Nikkei, which quoted the firm’s vice chairman on Friday.
The Japanese steelmaker’s vice chairman, Takahiro Mori, stated that the company plans to sell assets, including real estate and inventories, to enhance capital efficiency in light of the U.S. Steel acquisition. Earlier this year, Nippon Steel secured $16 billion in loans from three major Japanese banks to support this takeover. However, political resistance to the deal has emerged in the United States, particularly with the presidential elections approaching on November 5.
As a result of the U.S. Steel deal, Nippon Steel’s debt-to-equity ratio is anticipated to rise from 0.5 to 0.9. Both companies aim to finalise the transaction by the end of December, contingent on receiving the necessary approvals.
Mori indicated that this ratio could potentially decrease to 0.7 by the end of March if certain measures are implemented.
Source: Reuters
