Brazil state may help bail out steelmaker Usiminas - report
SAO PAULO Feb 15 (Reuters) - Brazil's state of Minas Gerais is considering extending tax relief and an emergency credit line to Usiminas, O Tempo newspaper reported on Monday, as the steelmaker struggles with looming debt repayments, plunging sales and a dispute between major shareholders,
Minas Gerais has tried unsuccessfully to broker an accord between Nippon Steel & Sumitomo Metal Corp and Techint Group, the company's two largest shareholders, to inject fresh capital into Usiminas, according to O Tempo.
An accord between Nippon Steel and Techint is key to allowing Usiminas to win better repayment terms from banks, Marco Antônio Castelo Branco, president of state development agency Codemig, told the newspaper.
Reuters reported on Friday that Usiminas is in talks with four major banks to refinance about 4 billion reais ($1 billion) in loans maturing in the next two years.
Castelo Branco, a former chief executive officer of Usiminas, said BDMG, the Minas Gerais state development bank, could extend an undetermined credit line to ease the steelmaker's need for fresh cash. He declined to elaborate on potential state-led tax relief measures for the company.
"It's surprising seeing such an important company falling into paralysis, without moving forward because its shareholders don't want to give in," Castelo Branco told the newspaper.
Codemig declined to immediately confirm Castelo Branco's comments. Usiminas, Nippon Steel and Techint all declined to comment.
Nonvoting shares of Usiminas rose 3.5 percent to 0.88 reais on Monday.
At stake is the survival of Usiminas, founded 53 years ago to help supply flat steel products to Brazil's thriving auto-making and home appliances industries located in Minas Gerais. Continuación...