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Ternium Completes Transfer of Sidor Shares to Venezuela
05/08/2009 - Ternium SA completes the transfer of its entire 59.7% interest in Sidor to Corporación Venezolana de Guayana, a Venezuelan governmental entity.
Ternium SA has completed the transfer of its entire 59.7% interest in Sidor, CA to CVG (Corporación Venezolana de Guayana), a Venezuelan governmental entity.
The transfer was achieved as a result of Venezuela's Decree Law 6058, which ordered that Sidor and its subsidiaries and associated companies be transformed into state-owned enterprises and declared the activities of such companies of public and social interest. While CVG had assumed operational control of Sidor on July 12, 2008, Ternium had retained formal title over the shares until now.
CVG paid US$400 million in cash against the aggregate amount of US$1.97 billion that Ternium has agreed to receive an as compensation for its Sidor shares. The balance has been divided in two tranches, the first of which totals US$945 million and will be paid in six equal quarterly installments. The second tranche is to be paid at maturity in October 2010, subject to quarterly mandatory prepayment events based on the increase of the WTI crude oil price over its May 6, 2009 level.
Ternium, a leading steel company in Latin America, manufactures and processes a wide range of flat and long steel products for customers active in the construction, home appliances, capital goods, container, food, energy and automotive industries. With its principal operations in Mexico and Argentina, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. The company has annual production capacity of approximately 9 million tonnes of finished steel products.
