UPDATE 1-Brazil's CSN sinks as management fails to assuage debt worries

viernes 13 de noviembre de 2015 16:05 GYT
 

(Recasts to add share performance, comments, details on earnings throughout)

By Guillermo Parra-Bernal and Alberto Alerigi Jr

SAO PAULO Nov 13 (Reuters) - Shares in Cia Siderúrgica Nacional SA sank the most in a month on Friday, as management failed to assuage mounting concerns over a swelling debt burden at Brazil's second-largest listed maker of flat steel.

Executives led by Chief Executive Officer Benjamin Steinbruch told investors on a conference call to discuss third-quarter results that keeping capital spending near current levels is needed to stay competitive in steelmaking and mining.

CSN, as the company is known, is pushing ahead with plans to refinance debt, sell assets, but avoid fire-sales, and raise the price of some flat-steel products. Steinbruch has likened his choices to "war economy decisions."

Investments planned for next year will add value for shareholders in the medium term, Steinbruch said.

Net debt rose to a record 6.6 times 12-month trailing operational earnings last quarter. That is twice CSN's 3.4 net debt to EBITDA ratio a year earlier. Investors are uneasy about capital spending and working capital trends, which have further eroded CSN's already weakened balance sheet, said Leonardo Correa, an analyst with Banco BTG Pactual.

Dividend payments will resume next year, pending the outcome of some aspects like asset sales, Steinbruch noted.

Shares extended losses during the call, falling as much as 9 percent to 4.92 reais. The stock has shed 50 percent over the past six months.   Continuación...