Sidor's class B shareholders offer their 20% to govt

- Friday, August 27, 2010

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Venezuelan steelmaker Sidor's class B shareholders, who own 20% of the company, have offered to sell their stake to the government, Sidor board member Pedro Rondon told BNamericas.

"More than 3,500 people want to sell their shares to the government and recover the investment they made in the company, but the government hasn't given any response," Rondon said.

The workers want to sell because they do not want to be an obstacle for the government's socialist plans for Sidor, according to Rondon.

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"Nor do we want to carry on not knowing what will happen with the company," he added.

Workers want to sell their shares because they realize that the government is bothered by having partners that check up on financial statements, legal and technical issues, and the company's management, Rondon said.

PROPOSALS

The shareholders have three proposals to present to basic industries and mining (Mibam) minister Jose Khan.

The first is the direct and simple sale of the shares. The second involves a sale starting from the equity principle based on an agreement between the government and the Ternium steel group.

"That is to say, that the US$101.74/share price is recognized and paid to each one of the shareholders interested in selling," Rondon said.

The third proposal, which is still being worked on and which the workers still need to be consulted on, involves an exchange for bonds that state oil company PDVSA is issuing.

"The idea here is to cash in the shares and convert them into bonds that we know are payable at maturity and, once paid, the Sidor partners that sell will be able to determine what to do with the money," Rondon said.

Sidor is Venezuela's largest steelmaker and was nationalized in April 2008. The firm was previously owned by the Luxembourg-based Ternium (NYSE: TX) steel group. The plant, located in Ciudad Guayana, has liquid steel capacity of 4.2Mt/y.

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