Allens Arthur Robinson partners Vijay Cugati, Tom Story and Andrew Finch are heading up the team acting on the OneSteel capital raising, which aims to cut the company's debt margin and boost its funding flexibility.

The capital raising comprises a $240 million fully underwritten institutional placement and a non-renounceable 2-for-5 pro-rata entitlement offer to all eligible shareholders.

'The relationship between OneSteel and Allens was forged when we acted for OneSteel in acquiring Smorgon Steel, and has continued to be a close relationship," commented Cugati.

'We are very grateful for the opportunity to assist OneSteel in its important step in responding to the very challenging market conditions arising from the global financial crisis. Despite the testing timeframe to get the deal away, we worked very closely with the senior management team, who were able to deliver a strong case for OneSteel's business, enabling the institutional component of the offer to be fully underwritten at a price comparable to deals executed much earlier in the GFC.'

The capital raising announcement follows in the wake of OneSteel's revised net operating profit for the 2009 financial year to about $200 million. As a result of the downgraded profit expectations, OneSteel is accelerating its restructuring initiatives.

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"The earnings downgrade is disappointing and what we have seen is a rapid and significant deterioration in the market environment," OneSteel's Managing Director and CEO, Mr Geoff Plummer, said in a statement.

"Our actions reflect the current market circumstances and we are adjusting thecompany's cost base accordingly."