Brazil: Steelmaker threatens suit over Usiminas capital plan

Brazilian steelmakers Compañía Siderúrgica Nacional (CSN) has requested a Brazilian court to order their competitor, Usinas Siderúrgicas Minas Gerais SA (USIMINAS) to use the budget in one of its business units to review the terms of a recently proposed capital plan. CSN hopes to stem its losses due to their partial ownership of USIMINAS, once the largest flat steel producer in the country.

The suit would aim to annul the terms in USIMINAS’ capital plan, which CSN maintains will dilute the stock value and harm minority stakeholders. Under the existing agreement, USIMINAS could raise up to $279 million dollars for its voting shares.

Brazilian competition authority CADE ruled almost one year ago that CSN was not allowed to directly intervene in USIMINAS’ board of directors, and the companies have said that no merger or tie-in has been considered. The suit represents the latest attempt by CSN to increase their influence over USIMINAS, of which CSN owns 14.1% of voting shares and 20.7% of simple shares, placing it among its four largest proprietors.

Full Content: Reuters

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