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Report: The World's Biggest Steelmakers Owe More Than US$150B
08/18/2016 - The world’s 30 largest steelmakers are collectively saddled with net debts of US$150 billion, an average of US$5 billion apiece, and some steelmakers appear to be on the verge of bankruptcy, according to professional services firm Ernst & Young.
In a report, EY said that the rise in steel sector debt has occurred amid a decline in global and Chinese steel demand, spurred by weaker economic conditions and a rebalancing of the Chinese economy.
“Consequently, margins have shrunk and with a limited free cash flow, companies have turned to taking loans to finance their operations. As a result, leverage has steadily increased since 2008. We have also seen an increase in total debt as a percentage of total company assets, indicating that assets financed through debt have steadily increased,” EY wrote.
You can read the full report here.
“Consequently, margins have shrunk and with a limited free cash flow, companies have turned to taking loans to finance their operations. As a result, leverage has steadily increased since 2008. We have also seen an increase in total debt as a percentage of total company assets, indicating that assets financed through debt have steadily increased,” EY wrote.
You can read the full report here.
