|
|
| |
|
|
Nippon Steel & Sumitomo Metal and Ternium in discord over Usiminas-The 17th China(Guangzhou) International Tube&Pipe Expo
3/15/2016 Tube&Pipe exhibition |
--------------------------------------------------------------------------------------------------------------- |
|
Nikkei reported that Nippon Steel & Sumitomo Metal plans to assist troubled steelmaker Usiminas'' restructuring by boosting its investment. But its disputes with co-shareholder Ternium of Argentina could complicate Brazilian company''s path to recovery. The Brazilian company, also known as Usinas Siderurgicas de Minas Gerais, approved the Japanese company''s additional investment of up to 30 billion yen ($263 million) at a management council meeting Friday. Ternium, which has been at odds with Nippon Steel, proposed a separate rescue plan.
Given that Nippon Steel and Ternium have an agreement to coordinate business plans involving Usiminas beforehand, a decision by a split vote Friday was unusual.
In late February, Nippon Steel President Kosei Shindo visited Paolo Rocca, the de-facto owner of Ternium living in Italy, to propose a capital increase. But Rocca rejected the idea, insisting there are other steps to be taken.
Usiminas suffered a 3.68 billion reais ($1.02 billion) net loss last year. It could face a cash crunch if it repays loans to financial institutions. As a condition for extending repayment deadlines, lenders demanded that Usiminas'' key shareholders increase capital. Ternium proposed Usiminas sell assets to raise funds instead. Usiminas was going to run out of money if it repaid debts due in mid-March, a company official said. Now funding is secured for the time being. But the fact that the two shareholders could not reach an advance agreement will likely have future implications. At a management council meeting this coming Friday, Ternium''s proposal will also be on the agenda, raising the specter of protracted management confusion.
The two companies have been fighting over Usiminas since September 2014, when Nippon Steel backed a motion to fire the Brazilian steelmaker''s president, who hailed from Ternium, for compliance reasons.
-The 17th China(Guangzhou)
International Tube&Pipe Expo
|
|
|
|
|
