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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