Siderar starts debt restructuring

Tuesday, February 12, 2002

Creditors of Argentine integrated steelmaker Siderar have unanimously agreed to a refinancing of its US$110mn euro medium-term note (series 2), the company told Buenos Aires Stock Exchange.

The parties will now negotiate in good faith for an extension to the payment of the US$96.25mn due during this year and next.

The development follows the company only partially paying the principal and interest on the first quota.

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Siderar, which describes itself as Argentina's largest steel company, had already scaled down its 2002 investment plans to a mere US$30mn because of the country's financial crisis. The money will be spent on reducing costs and improving quality.

A few days ago, Argentine long products steelmaker Acindar told BNamericas it had chosen Credit Suisse First Boston investment bank to help it restructure following a December declaration it was postponing principal and interest payments on some US$400mn worth of debt.

Acindar does not expect to meet a February 15 deadline to pay interest on a negotiable security, given Argentina's woes, company officials say. Sales in January were 45% of what they were same-month 2001.

Acindar is jointly controlled by Argentina's Acevedo family and Brazil's Belgo Mineira.