Usiminas' Controlling Shareholders Considering Support for the Ailing Business
02/19/2016 - The joint controlling shareholders of Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA are trying to settle on a way to prop up the ailing business, which is struggling to make it through some of the worst times in Brazil’s steel industry in years.
According to the Reuters news service, the controlling shareholders, Japan’s Nippon Steel & Sumitomo Metal Corp. and Italy’s Techint Group, agree that Usiminas is in need of fresh capital, but haven’t yet agreed on a course. Measures under consideration include a capital injection, loans from both shareholders and a debt refinancing deal, Reuters said.
However, the companies have been at odds on how the business should be run, and sources told Reuters that the companies refused to discuss the matter at a board meeting 17 February, putting off a decision until March.
Usiminas posted an adjusted loss before interest taxes, depreciation and amortization of US$62.7 million, which exceeded analysts’ expectations, according to Bloomberg News.
The Nikkei Asian Review said Usiminas has been working to restructure operations, idling a blast furnace among other steps. The company also is considering selling assets, disclosing that it had hired a financial adviser last year as it considers selling a part of or all of its Usiminas Mecanica manufacturing subsidiary.
With some of its debt coming due soon, the company has asked its lenders for extensions, according to Nikkei Asian Review.
However, the companies have been at odds on how the business should be run, and sources told Reuters that the companies refused to discuss the matter at a board meeting 17 February, putting off a decision until March.
Usiminas posted an adjusted loss before interest taxes, depreciation and amortization of US$62.7 million, which exceeded analysts’ expectations, according to Bloomberg News.
The Nikkei Asian Review said Usiminas has been working to restructure operations, idling a blast furnace among other steps. The company also is considering selling assets, disclosing that it had hired a financial adviser last year as it considers selling a part of or all of its Usiminas Mecanica manufacturing subsidiary.
With some of its debt coming due soon, the company has asked its lenders for extensions, according to Nikkei Asian Review.
