Tenaris S.A. announced Monday that it has revised its value in use calculation for its investment in Usinas Siderurgicas de Minas Gerais S.A. (Usiminas) and will restate its financial statements to reduce the carrying amount of the Usiminas investment to US$122 million as of September 30, 2014. As a result of this restatement, the financial statements at December 31, 2014 and March 15, 2015 will also be restated to reflect the lower carrying value of the Usiminas investment. Tenaris's cash flows are not affected.
These actions follow the conclusion of previously disclosed discussions with the Staff of the US Securities and Exchange Commission regarding Staff comments relating to the carrying value of the Company's investment in Usiminas under IFRS as of September 30, 2014 and subsequent periods.
The Staff had requested information regarding Tenaris's value in use calculations and the differences between the value in use carrying amounts and certain fair value indicators, including in particular the purchase price of BRL12 (approximately US$4.8) per share which the Company's affiliate Ternium S.A. paid in October 2014 for the acquisition of 51.4 million additional Usiminas ordinary shares from Caixa de Previdencia dos Funcionarios do Banco do Brazil (PREVI).
In connection with these discussions, the company revised the assumptions used to calculate the carrying value of the Usiminas investment at September 30, 2014 in light of the staff's comment that the PREVI transaction price provided objective evidence of the value of the Usiminas investment. The restated carrying value as of September 30, 2014 has been revised to reflect a per share value equal to the PREVI transaction price.