{"id":91574,"date":"2024-10-31T10:47:36","date_gmt":"2024-10-31T13:47:36","guid":{"rendered":"https:\/\/murray.adv.br\/?p=91574"},"modified":"2024-10-31T10:47:38","modified_gmt":"2024-10-31T13:47:38","slug":"csn-to-sell-up-to-11-of-mining-unit-still-eyeing-intercement","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/csn-to-sell-up-to-11-of-mining-unit-still-eyeing-intercement\/","title":{"rendered":"CSN to sell up to 11% of mining unit, still eyeing InterCement"},"content":{"rendered":"\n
Exclusive agreement for the acquisition was renewed this week, with expectations that the deal will be finalized by year-end, according to people close to the Brazilian steelmaker<\/em><\/strong><\/h6>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n\n\n\n

10\/31\/2024 <\/p>\n\n\n\n

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Benjamin Steinbruch\u2019s Companhia Sider\u00fargica Nacional (CSN) announced the sale of up to 11% of its mining subsidiary to Japan\u2019s Itochu Corporation, in a deal potentially exceeding R$4.3 billion, people familiar with the matter told Valor. The funds will be used to reduce the steelmaker\u2019s leverage, providing greater financial strength as the group also negotiates the acquisition of InterCement, owned by Mover.<\/p>\n\n\n\n

The sale of the minority stake includes a premium ranging from 20% to 30% over the current stock price of the mining company on Brazil\u2019s B3 stock exchange, according to sources. CSN stock ended the Wednesday\u2019s session up 2.23% at R$11.94, while CSN Minera\u00e7\u00e3o shares dropped 0.67%, closing at R$5.91.<\/p>\n\n\n\n

Based on Tuesday\u2019s closing price, the 11% stake is valued at around R$3.6 billion, with the premium pushing the deal\u2019s total value to over R$4.3 billion. However, people close to the deal noted that some steps remain before the transaction is finalized, including the signing of a definitive agreement and approval from Brazil\u2019s antitrust authority, CADE. The deal is expected to close within 30 days.<\/p>\n\n\n\n

CSN had previously indicated its intention to sell a portion of its mining business and to seek a minority partner for its energy division to reduce debt. Itochu already holds just under 10% of CSN Minera\u00e7\u00e3o\u2019s shares.<\/p>\n\n\n\n

As of June, CSN\u2019s net debt-to-adjusted EBITDA ratio stood at 3.36 times, driven by the depreciation of the real in the second quarter and higher investment levels. The company\u2019s goal is to reduce this ratio to between 1 and 2 times. Adjusted net debt totaled R$37.2 billion at the end of Q2.<\/p>\n\n\n\n

For analysts from Ita\u00fa BBA and Bradesco BBI, the sale of 11% of CSN Minera\u00e7\u00e3o at Tuesday\u2019s closing price would reduce financial leverage by 0.3 to 0.4 times, which they considered modest compared to CSN\u2019s target.<\/p>\n\n\n\n

In parallel with the mining sale, CSN is continuing negotiations to acquire InterCement, owned by Mover (formerly Camargo Corr\u00eaa). The exclusive agreement was renewed this week, with sources close to CSN expecting the deal to be signed by December.<\/p>\n\n\n\n

Negotiations are progressing, though pressure remains for Mover shareholders to fully assume the liabilities tied to the deal, which total R$4 billion. Initially, part of this amount\u2014R$1.5 billion\u2014was to be covered by creditor banks, said a person close to InterCement.<\/p>\n\n\n\n

Another sensitive issue for CSN is the involvement of lawyer Thomas Felsberg as an advisor in the transaction, as he is known for handling corporate restructuring for companies facing bankruptcy.<\/p>\n\n\n\n

People with knowledge of the situation indicated that InterCement\u2019s out-of-court restructuring process is advancing, with no immediate risk of a bankruptcy filing.<\/p>\n\n\n\n

If the company seeks protection from creditors, asset sales would occur through productive units.<\/p>\n\n\n\n

CSN is interested in acquiring InterCement\u2019s Brazilian operations, which would position it as a competitor for leadership in the cement sector alongside Votorantim, as well as a 51% stake in Loma Negra, providing CSN entry into the Argentine market.<\/p>\n\n\n\n

A person close to the negotiations said CSN does not plan to use cash or take out loans to finance the acquisition, given InterCement\u2019s high debt. Instead, CSN aims to restructure InterCement\u2019s liabilities as part of its out-of-court recovery, with a portion of the purchase price financed through debt.<\/p>\n\n\n\n

Another portion of InterCement\u2019s debt would be converted into equity in the resulting company formed by combining CSN Cimentos and InterCement, with creditor banks holding shares. While an agreement is expected to be signed by year-end, the transaction itself would likely close in 2025.<\/p>\n\n\n\n

Negotiations gained momentum at the end of the first half, with the automatic renewal of CSN\u2019s exclusivity agreement. In August, InterCement initially declined to renew the deal, but talks continued, and a new exclusivity agreement was signed in September.<\/p>\n\n\n\n

In addition to InterCement\u2019s heavy debt load, sources pointed to CSN\u2019s financial leverage and the relative delay in selling assets that could improve liquidity as hurdles for the acquisition. In the case of CSN Minera\u00e7\u00e3o, iron ore price volatility this year prolonged talks with potential buyers. Negotiations related to CSN\u2019s energy business, including the Rio Grande do Sul-based CEEE, were also impacted by damage caused by heavy rains in the state in May.<\/p>\n\n\n\n

In 2021, Mr. Steinbruch\u2019s company acquired the Brazilian assets of Swiss cement maker LafargeHolcim, in a transaction fully approved by the CADE without conditions. This added 10 million tonnes of capacity, making CSN the third-largest cement producer in Brazil.<\/p>\n\n\n\n

In 2023, Brazil sold 62 million tonnes of cement, a 1.7% decline from 2022, which had already seen a 2.8% drop, according to the National Cement Industry Union (SNIC). The volume sold in 2023 matches the levels seen in 2011.<\/p>\n\n\n\n

CSN said it had no further comment beyond its statement to the Securities and Exchange Commission of Brazil (CVM). InterCement and Mr. Felsberg also declined to comment.<\/p>\n\n\n\n

*By Stella Fontes, M\u00f4nica Scaramuzzo \u2014 S\u00e3o Paulo<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Exclusive agreement for the acquisition was renewed this week, with expectations that the deal will be finalized by year-end, according to people close to the Brazilian steelmaker 10\/31\/2024 Benjamin Steinbruch\u2019s Companhia Sider\u00fargica Nacional (CSN) announced the sale of up to 11% of its mining subsidiary to Japan\u2019s Itochu Corporation, in a deal potentially exceeding R$4.3 […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25588],"class_list":["post-91574","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-csn-to-sell-up-to-11-of-mining-unit"],"yoast_head":"\nCSN to sell up to 11% of mining unit, still eyeing InterCement - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/csn-to-sell-up-to-11-of-mining-unit-still-eyeing-intercement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CSN to sell up to 11% of mining unit, still eyeing InterCement - 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