BlueScope Steel will raise A$600 million ($790 million) from shareholders to repay part of its A$1.6 billion in net debt and strengthen its financial position.
The embattled steel maker is trying to turn itself around after posting a A$1 billion loss and sacking more than 1000 workers in the past financial year.
Chief executive Paul O'Malley said earnings continued to be hit by the high Australian dollar, low steel prices, high raw material costs and softer demand.
"The entitlement offer will result in a more appropriate capital structure for the company," he said. "Following the entitlement offer we will remain focused on further reducing the company's debt levels over time."
BlueScope said its net debt had increased to A$1.5 billion by October 31, up from A$1.068 billion at June 30 because of restructure, working capital and capital expenditure costs. Shareholders registered a large protest vote at its annual meeting last week, after A$3 million in executive bonuses were awarded.
