Brazilian flats steelmaker Usiminas cannot access BRL 12 million ($3.83 million) from Kofar, despite being a creditor at the struggling company, according to a court ruling.
As a Kofar creditor, Usiminas could receive BRL 12 million in fiduciary guarantees, but since Kofar is in bankruptcy protection, the steelmaker cannot access the money. Kofar is a steel and civil construction materials distributor, which is part of Usiminas’ distributors affiliated network.
A Sao Paulo state court said the money was essential for maintaining Kofar’s activities, however, since Usiminas is still a creditor at Kofar, it might receive the money within the terms of Kofar’s bankruptcy protection plan.
Recently, Usiminas made progress in securing BRL 700 million in cash ($223.6 million) from its JVowned iron ore producer MUSA.
According to a recent filing at the country’s securities exchange commission, CVM, the board of MUSA unanimously approved the JV to reduce its capital by BRL 1 billion ($320.4 million), considering it “too excessive.” Since Usiminas was a controlling shareholder at the company with a 70 percent stake, it should receive back BRL 700 million ($223.6 million) in cash, which will help Usiminas to honor its debt restructuring plan signed with creditors last year.