Sidor's class B shareholders call for investigation of Ternium payment

Tuesday, July 19, 2011

Venezuelan state steelmaker Sidor's class B shareholders, who own 20% of the company, have asked authorities to investigate the payment that steel group Ternium (NYSE: TX) received from the government for the expropriation of the company, the representative of class B shareholders, Pedro Rondón, told BNamericas.

"We have already gone to the attorney general, to the anticorruption and organized crime organizations to ask them to investigate because we believe that the nation's interests were affected," Rondón said.

The complaint is in response to the US$1.97bn indemnity that state heavy industry holding CVG agreed to pay Ternium after President Hugo Chávez expropriated Sidor.

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"Ternium's assets were protected at the expense of national interest, while the shareholding workers, who own 20% of the company, did not receive compensation," he said.

In May 2009, the Venezuelan government and Ternium reached a settlement following the nationalization of Sidor. However, Rondón believes that the government, rather than paying what the company was worth, paid Ternium's share, and that is what workers want investigated.

In April 2008, Chávez announced that the state would take control of Sidor, in which Ternium had a 59.7% stake. In November 2010, Ternium reported that the state had not made the final compensation payment of US$256mn.

The Sidor plant, located in Ciudad Guayana, has liquid steel capacity of 4.2Mt/y but has been running at well below that level since its nationalization.

Ternium is controlled by Italian-Argentine group Techint.