BlueScope Steel, which will get hundreds of millions of dollars under the carbon tax in compensation and free permits for the steel industry, surprised investors today by launching an ”accelerated” fund-raising to cut debt. And it’s no small amount, it wants to raise $600 million to repay a soaring debt bill that the company though it had under control.

A combination of poor profits, the high value of the Australian dollar, weak demand and restructuring costs aimed at trying to “right-size” the group, saw a 50% blow out in the company’s debt burden in four months. The company has already announced plans to cut exports, close a blast furnace and other facilities and sacked about 1000 employees in NSW and in Victoria.

The reported issue takes the amount this company had drained from shareholders since December 2008 to more than $2.5 billion and every last dollar of that money has been eaten up by the company’s businesses.

This is not a company, it is a black hole, a bottomless pit.

BlueScope is going to get hundreds of millions of dollars of benefits from the carbon tax. Based on their 2010 carbon emissions and a starting price of $23, the company could get up to $801 million in the first three, fixed price years of the scheme in free permits, with hundreds of millions more to come in the following years.

BlueScope also have access to a $300 million steel industry adjustment fund. Julia Gillard, under pressure from unions and the manufacturing sector, brought forward $100 million of that in August so that BlueScope could access it immediately rather than wait for the carbon price to kick in. In total, BlueScope comes out of the carbon pricing package tens of millions ahead of where it is now.

But to get that largesse, the company had to remain alive and in business, and out of the hands of administrators.

So today’s fund-raising, which was revealed to the market before trading today and came five days after the company held its AGM last Thursday and didn’t mention the rapidly rising debt in the prepared speeches by the chairman and the CEO, even though today’s statement clearly illustrates the problem.

BlueScope said its net debt had increased to $1.555 billion by October 31, up from $1.068 billion at June 30.

With that sort of increase, you would have thought that 17 days after October 31, the board and management would have been in a position to reveal the problem and talk to shareholders about it at the AGM last week.

But nary a word at a meeting which was dominated by shareholder objections to the payment of nearly $3 million in bonuses to management, despite BlueScope losing just over a billion dollars in the June 30 year.

The board and chairman Graham Kraehe spent time defending the bonuses and reaffirmed the forecast for a big loss for the December half year at least, but no word of the growing need for new capital which suddenly became a problem so large that a $600 million “accelerated” issue at a huge discount, is now needed urgently.

The fully underwritten, 4-for-5 entitlement will be made at 34 cents, compared to Monday’s closing price of 61c. That in itself tells us that BlueScope is in desperate need of a lot of new capital, very quickly. There will be a heavy dilution of existing shareholders who do not take up their entitlements.

Institutional and retail shareholders will be asked to put up the money, again.

BlueScope raised just of $1.4 billion in a similar issue in May and June of 2009. That was also designed to restructure the company’s debts as well. That issue came only five months after $550 million was raised from investors in late 2008.