Nippon Steel, a major shareholder at
Brazil flats producer Usiminas, proposed a power alternation management system at the local steelmaker as a way to end ongoing legal disputes involving a Japanese investor and Ternium, who also owns the Brazilian producer.
Citing sources close to the matter, a newspaper known as Valor said the proposal is Nippon Steel’s maximum “give in” approach to the issue.
Recently, Ternium proposed an “exit clause” to their existing joint shareholders agreement, which ends in 2031, under which any of the two major shareholders leaving Usiminas could sell its stake to the remaining party.
Valor said Nippon Steel discards the option, but is willing to concede in allowing a power alternation system at Usiminas.
Under Nippon’s new proposal, Sergio Leite, a former Usiminas CEO indicated by Ternium, could get his seat back if Romel de Souza, Nippon’s appointed executive, becomes the president of the company’s council. As of now, Souza is Usiminas’ CEO, while Leite remains as a commercial vice-president.
Leite was at the CEO seat for less than five months, after being elected as the company’s CEO in a shareholders meeting in May this year. However, in October this year, a state court in Minas Gerais ruled that Souza should get back to the CEO seat, following a request from Nippon.
Nippon argued at the time the nomination of Leite didn’t comply with the shareholders’ agreement, since the indication was made without prior consent of Nippon Steel.
Ternium told Valor Nippon’s power alternation proposal is “unsustainable.”