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Board of Brazil's Usiminas okays US$275mn capital boost

Bnamericas Published: Tuesday, March 15, 2016

Brazilian steelmaker Usiminas' board approved on Friday a 1bn-real (US$276mn) capital boost through the issue of 200mn new ordinary shares priced at 5 reais, the company said in a filing.

The second largest Brazilian steel group has been trying to sell non-core assets for months to recover some financial strength. It is also in negotiations with creditors to extend some of its debt.

During a board meeting on Friday, each of Usiminas' main controllers, Japan's Nippon Steel and Sumitomo Metals (NSSMC) and Luxembourg-based Ternium, presented its own capital increase proposals, with Nippon's the winner.

Nippon's proposal is due to be presented to shareholders at a still-to-be-arranged extraordinary meeting.

Ternium's proposal will be resubmitted at the board's next meeting, planned for Friday. The steelmaker voted for the issue of 100mn ordinary shares plus another 100mn class 'A' preferred shares priced at 4.35 reais and 1.28 reais, respectively.

NSSMC and Ternium have been embroiled in a power struggle over Minas Gerais-based Usiminas since 2014.

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