WEST CHESTER TWP. — To finance the company’s planned purchase of a steel plant in Michigan, AK Steel Holding Corp. on Monday announced a new common stock offering of 35 million shares for sale. Also, AK Steel is borrowing $430 million through an issue of senior notes.
There is an option for the underwriters of the steelmaker’s stock offering to purchase up to an additional 5.25 million shares over the next 30 days.
The West Chester Twp.-based company plans to use all net proceeds from the sale of the notes, plus a portion of the net proceeds from the sale of the common stock, to pay for the acquisition of Severstal Dearborn LLC. AK Steel announced plans in July to expand to Michigan and acquire the plant. Pending final regulatory approval, the $700 million deal could close by the end of September, according to the company.
AK Steel intends to use any remaining money raised from the sale of common stock to repay other borrowings and for general corporate purposes.
Shares of AK Steel stock are currently selling in the range of $10.