Steel and iron ore producer Arrium has freed up cash to help it fend off a corporate predator, by selling a minor asset in New Zealand.

Arrium revealed this afternoon it would raise $73.4 million by selling its stake in New Zealand company “Steel and Tube Holdings”.

Steel and Tube is publicly listed in New Zealand, and Arrium plans to sell its 50.3 per cent stake in the company at a price that is roughly 15 per cent below the current market rates.

Arrium said the money raised would be used to reduce its debt and gearing levels, which have become a much bigger concern in recent weeks as the iron ore price has slumped.

Arrium last week rejected a takeover bid by a foreign consortium led by Korean steel giant POSCO and commodities trader Noble Group.

The consortium is expected to return with an improved offer in coming weeks.