Brazilian CSN nears German Stahlwerk Thüringen subsidiary sale

Brazilian steelmaker Companhia Siderúrgica Nacional (CSN) is focused on the sale of assets as well as other structured financial initiatives to reduce its debt. The company indicated this during its third-quarter earnings conference call with analysts monitored by Kallanish.

“The debt is our greatest concern,” said ceo Benjamin Steinbruch. “We are negotiating the sale of Germany-based longs mill Stahlwerk Thüringen (SWT). It’s simply an issue of price… Now, if we have had a year of negotiation it’s because there is interest on the part of the buyer side as well as on ours as a seller. We’re reaching the final stage, and not surprisingly we could sell SWT in a week or two weeks or not have any business at all.”

Steinbruch also mentioned the possible sale of an 8% stake in the CSN iron ore unit. “If we have to sell part of the mining to reach a more comfortable position in working with a less leveraged company, we will. 8% will be readily available for sale,” the ceo explained.

CSN holds an 88% stake in CSN Mineração. The other 12% is owned by Asian investors.

CSN saw its Q3 results underperform mainly due to the scheduled maintenance of blast furnace no. 3 and consequent planned consumption of stocks, Steinbruch continued.

“This has been a quarter of transition. We had an impact on the purchase of slabs. We paid at 30 days, while our cycle is normally 180 days. The depreciation of the Brazilian real, as well as the payment of dividends also affected our performance in Q3,” confirmed the ceo.

“With the revamp of BF3, we were limited to produce 330-340 tonnes of steel in Q3. The restart of the facility goes according to the plan. We are through a ten-day period of a gradual and controlled increase in production and on 15 November we do believe we will return to a normal. Therefore, our output should be able to reach 400 million tonnes of steel during the fourth quarter,” Steinbruch explained.

The company’s targets to clear its steel stock by the end of 2019. CSN has begun to negotiate a price increase in contracts with the automotive and white goods sectors, said Steinbruch.