This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AK Steel Joint Venture Completes $375 Million Financing For New Iron Ore Pellet Plant

Stocks in this article: AKS

WEST CHESTER, Ohio, May 20, 2013 /PRNewswire/ -- AK Steel (NYSE: AKS) said today that Magnetation LLC ("Magnetation"), its joint venture with Magnetation, Inc., has successfully completed a $325 million senior secured note offering and has entered into a $50 million senior secured credit facility.  The proceeds from the note offering will be used primarily to fund construction of a new plant in Reynolds, Indiana to produce high-quality iron ore pellets, a critical steelmaking raw material.  Production from the pellet plant will supply AK Steel's blast furnaces located in Ohio and Kentucky. 

"We are excited to reach another milestone event in AK Steel's strategic initiative to become more self-sufficient in steelmaking raw materials," said James L. Wainscott, Chairman, President and CEO of AK Steel.  "This transaction positions Magnetation well to continue on its path of accelerated construction of the pellet plant."

AK Steel's strategic investment in Magnetation will provide the company with about 50 percent of its annual iron ore requirements beginning in 2015.  By becoming more vertically integrated, AK Steel will gain greater control over its cost structure, enhance its raw materials self-sufficiency, and benefit by significantly reducing its exposure to the volatile global market for this critical steelmaking input. 

In conjunction with the completion of the Magnetation financings, AK Steel said that it has contributed $50 million to Magnetation as part of AK Steel's planned remaining $150 million investment in the joint venture.  Thus far, AK Steel has invested approximately $200 million in Magnetation of a planned total of nearly $300 million.  AK Steel plans to contribute the remaining $100 million during 2014 as needed to support the construction of the new pellet plant.

Construction of the pellet plant is underway and should be completed in about 18 months.  Initial pellet production is anticipated during the fourth quarter of 2014.  When fully operational, the Magnetation plant will produce about three million tons of iron ore pellets annually.  

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs