Paraguay's President Horacio Cartes plans to retake possession of local steelmaker Acepar because of alleged irregularities during its privatization in 1997 and in ongoing operations, a government press release said.
"We are now waiting on the arbitration process which we expect to end with the steelmaker in the hands of the state and the termination of [Acepar's] contract," attorney general Roberto Moreno was quoted as saying by local media.
Local consortium Cosipar gained a 66.7% interest in Acepar in 1997 for US$35mn, in a transaction Moreno called rife with irregularities. Paraguay's senate called for retaking possession of the steelmaker in 2009 but never stated arbitration. Then last year the senate called for an intervention in the steelmaker in order to investigate irregularities within management.
Cartes' decision to finally retake Acepar centers on alleged breaches of contractual clauses. "The government intends to put to an end more than 15 years of corruption," central government legal director Sergio Godoy said.
According to reports Acepar currently holds US$50mn in liabilities as well as more than US$5mn of debt to the Paraguayan government.