Selling Out with High Hopes
Corus's acquisition of Brazilian steelmaker Companhia
Siderúrgica Nacional slashes the Latin American company's financing costs and folds it into an investment grade European competitor.
Crippled with foreign debts as the Brazilian real crashed, and facing an uncertain future in a consolidating global steel industry Rio de Janeiro's Companhia Siderúrgica Nacional (CSN) had no choice but to look for a knight in shining armor. Anglo-Dutch Corus came to the rescue in July, taking over CSN in a stock deal to form the fourth-largest steel group in the world. José Marcos Treiger, CSN's head of investor relations, says, "We are creating a company that will give Brazilian shareholders a prominent position in a new international company with liquid shares in an investment grade country."
The timing of the deal with Corus couldn't be better for CSN. It has $2.6 billion in debt and 80% of its sales are concentrated in Brazil. Its debt-to-equity ratio has risen steadily, to 161.8% at the end of June from 90.4% at the...
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