Split in Usiminas still likely as shareholders elect board and fight CSN

Wednesday, 11 May 2016 00:05:30 (GMT+3)   |   Sao Paulo
       

A split in Brazil’s flats producer Usiminas is becoming more likely, as the company’s shareholders, Ternium Techint and Nippon Steel, have faced a series of legal disputes over the last few years and remain opposed.

Usiminas is looking to approve on Thursday major changes in the company’s executive board. Additionally, non-official conversations and several media reports point that the company’s split has been gaining steam.

Unnamed sources quoted by local media said recently discussions could result in the separation of the company’s two units: the Cubatao mill, located in the city of same name in the state of Sao Paulo, and the Ipatinga mill, located in the city of same name in the state of Minas Gerais.

If an agreement is reached by the two diverging sides, Nippon Steel could assume the Ipatinga mill, while Ternium would own the Cubatao asset.

On the other hand, the two diverging sides, whose legal disputes became public in 2014, have recently partnered to not let CSN, a competitor and a minor shareholder at Usiminas, appoint members for the Usiminas board.

The move is expected to give a decision-making power to minority shareholders.

As the company’s split discussions advance, market analysts say CSA, the mill in which Vale sold back a stake to ThyssenKrupp, could partner with Ternium if a division in Usiminas takes place.

Whether or not the split happens, market sources say Ternium and Nippon should fight to together to not allow CSN to gain influence in Usiminas.



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