Both Sumitomo and Serra Azul Iron Ore, two minority shareholders that own a combined 30 percent of Usiminas’ mining arm, MUSA, declined to reduce MUSA’s capital in an attempt to help flats steelmaker Usiminas to raise cash, Usiminas said on Tuesday.
Usiminas said it tried in a board meeting to reduce MUSA’s capital by BRL 1 billion for considering it “too excessive,” but Sumitomo and Serra Azul Iron Ore didn’t agree to the proposal due to a shareholder’s agreement.
However, Usiminas said Sumitomo’s opposition was an “abuse of rights,” and shouldn’t produce any legal effects.
“For this reason, Usiminas will seek, through a legal way, to invalidate [Sumitomo’s] opposing vote,” it said.
Getting access to MUSA’s money would help Usiminas raise cash to meet its recently approved debt restructuring plan.