Sidor reduced debt to $700 million with restructuing deal

Sidor reduced debt to $700 million with restructuing deal

Siderurgica del Orinoco (Sidor) which is the largest steel producer in Venezuela reported that they have finally signed the deal for the debt restructuring with the government, Amazonia Consortium, Venezuela's development bank, CVG (Corporacion Venezolana de Guyana), Deutsche Bank and four local banks. This deal will enable the company to reduce its debt around 54% to $700 million. According to the agreement, state's share increased from 30% to 40.3% which will decrease after the transfer of 20% Sidor shares to the employees dismissed during privatization back in 1997, is completed. Added to that 70% share of the Amozonia Consortium is decreased to 59.79%. Sidor had financing problems which got worse as global demand and steel prices fell significantly. Besides, the recession the country was going through had its negative effect on company's problems. Thus, company decided to restructure its debt and signed a deal in July 2002, where determining terms as above took almost one year.