Gerdau reportedly looking to sell Spanish unit
Brazilian steel group Gerdau is allegedly looking to sell its Spanish subsidiary Sidenor.
The steel giant has hired bank Santander to manage the sale, French newspaper Le Républicain Lorrain reported on Thursday.
Gerdau Sidenor employs 2,250 people in Spain and is a leading European manufacturer of special steel and large forgings. The company is a major competitor of France-based Ascométal, which Gerdau unsuccessfully tried to acquire in 2014.
News about Sidenor's sale surprised most industry experts, according to the report. When asked about the sale, a spokesperson from Gerdau told BNamericas that the company does not comment on market rumors.
Domestically, Gerdau is facing headwinds from Brazil's economic recession and lackluster industrial activity, especially in steel consuming segments such as construction and capital goods.
On October 7, Moody's downgraded the steelmaker's outlook to negative from stable, arguing that its credit profile and operations remain solid but the deterioration in market fundamentals for the steel industry in Brazil and the continued challenges for the global steel industry affect its outlook.
One week earlier, local media reported Gerdau as mulling a 1.5bn-real (US$372mn) capital increase. The move would be necessary due to the company's large debt in relation to its current 1.2bn reais market cap.
Sidenor is Spain's largest specialty steelmaker, with capacity to produce over 1Mt/y. The Brazilian group also has plants in Madrid, Cantabria and Cataluña, and commercial offices in Germany, France, Italy and the UK.
Porto Alegre-based Gerdau is the largest Latin American steelmaker and the biggest long steel producer in the Americas.
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