Arcelor might take over CST stakes from Acesita
Arcelor could obtain a direct stake in
slab maker CST through a creative share swap, according to business daily Jornal de Commercio.
Stainless steel producer Acesita, which is controlled by Arcelor, will sell its stake in Vitoria-based CST to the mother company to reduce its liabilities.
Arcelor executives are expected to go to
Brazil next month to execute the operation and deal with Acesita's debt problems.
The timing for the transaction seems good as other major shareholders in CST, mining giant CVRD and Japanese steel mill Kawasaki, are not likely to exercise their preferential rights to the Acesita stake so as to push forward plans to merge the assets of CST with those of Belo Horizonte-based flat steel maker Usiminas.
Acesita holds 43.9% of CST's common shares, CVRD and a Japanese consortium led by Kawasaki each hold 22.5% stakes.
Talks on merging CST and Usiminas, to create a company with 15 million tons output capacity, have taken place since 1997.
"There is a logistics synergy between Usiminas and CST, which makes a Vitoria-Minas corridor feasible," one executive that is following the negotiations was quoted saying in Estado de Sao Paulo newspaper.