Brazilian integrated steelmaker Gerdau is reportedly looking to sell a long steel mill in Mexico to local steelmaker Simec, according to a media report from Valor. The mill, known as Siderurgica Tultitlan, is worth some $100 million, the media report estimated.
Citing unnamed sources, Valor said the terms of a potential transaction have already been defined, following months of conversations. Under the terms of the deal, Simec would pay for part of the asset in cash and another other part in a deadline yet to be defined.
Gerdau bought Tultitlan in March 2007 for $259 million. The mini-mill, located in Mexico City, produces rebar and sections, and has a 400,000/year finished steel capacity. The media report said Gerdau put the mill up for sale last year.
Gerdau also owns Mexican mill Gerdau Corsa, which produces about 700,000 mt of sections per year.
Additionally, Gerdau has also announced it sold two hydroelectric plants in the state of Goias, Brazil, for a combined BRL 835 million ($256.5 million) to Kinross Brasil Mineracao, a subsidiary of Kinross Gold Corporation. The sale, along with the reported sale of Siderurgica Tultitlan, is intended to strengthen Gerdau’s cash position. So far, Gerdau has disinvested BRL 6 billion in the last four years, the steelmaker said.