Steelmaker ArcelorMittal has announced a plan to reduce debt by $4bn as it disclosed a bigger-than-expected net loss for the calendar year.

According to Financial Times, the Luxembourg-based company said it plans to reduce pro forma net debt as of December 31 to below $12bn by way of a $3bn rights issue and $1bn from the sale of its minority stake in Gestamp, a Spanish engineering company.

"This capital raise, combined with the sale of our minority shareholding in Gestamp, will accelerate the company’s debt reduction plans and enable us to reduce net debt to less than US$12 billion. This will help ensure that the business is resilient in any market environment and puts ArcelorMittal in a position of strength from which to further improve performance," Lakshmi Mittal, the company’s chairman and chief executive, said.

The company also revealed a five-year strategic plan, which aims to boost free cash flow to $2bn annually and EBITDA performance by $3bn.

For 2015, ArcerlorMittal booked a 19.8 per cent year-on-year drop in sales to $63.58bn and less than expectations of $64.61bn. The company’s net loss blew out to $7.95bn from $1.09bn in 2014, owing to impairment charges on the company’s mining assets and the large drop in the iron ore price.

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