Nippon Steel Plans Asset Sale of USD 211 Million to Manage Debt While Pursuing U.S. Steel Acquisition
Nippon Steel Plans Significant Asset Sale
Nippon Steel is set to sell at least 30 billion yen (approximately USD 211 million) in assets during this fiscal year to manage its debt effectively as it waits for news on its ambitious USD 14.9 billion bid for U.S. Steel. In a statement reported by Nikkei, vice chairman Takahiro Mori emphasized the need for this strategic move to enhance capital efficiency, particularly amidst the ongoing challenges presented by the auto industry's political opposition in the United States.
Debt Management Amid Acquisition Efforts
Earlier in the year, Nippon Steel secured an agreement with three Japanese megabanks for USD 16 billion in loans aimed at funding the U.S. Steel acquisition. However, the deal is currently encountering political hurdles linked to the upcoming presidential elections in the U.S. This has raised concerns about the impact on Nippon Steel’s financial structure, with its debt-to-equity ratio projected to rise from 0.5 to 0.9 due to the deal.
- USD 211 million asset sale planned
- Political opposition complicates U.S. Steel acquisition
- Debt-to-equity ratio expected to rise
Despite these challenges, Mori indicated that there are steps Nippon Steel can take to bring the debt-to-equity ratio down to 0.7 by the end of March, should the acquisition proceed as planned.
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