UPDATE 2-Nippon Steel looks to break up Usiminas after CEO appointment-source

martes 31 de mayo de 2016 22:16 GYT

(Adds Nippon Steel comments)

By Alberto Alerigi

SAO PAULO May 31 (Reuters) - A change of chief executive at Brazilian steelmaker Usiminas has accelerated plans for controlling shareholders Nippon Steel & Sumitomo Metal Corp and Ternium SA to break up the company, a source close to the Japanese firm said on Tuesday.

Nippon Steel, however, issued a statement later denying that it was planning to break up Usiminas, and a spokesman said the focus was on financial restructuring and completing an equity financing.

The Usiminas board last week appointed veteran executive Sergio Leite to the top job in a contested vote. He replaced Rômel Erwin de Souza, who had been backed by Nippon Steel.

In a split, Nippon Steel could take Usiminas' mill in Ipatinga, while Ternium could get the Cubatao mill in the neighboring state of Sao Paulo. The source said no official negotiations had begun.

The companies have been at loggerheads for nearly two years over control of the Brazilian steelmaker and a break-up has been considered by both sides.

Usiminas has already stopped steel production at its Cubatao mill, slowed work at its mines and laid off thousands of employees as it suffers through Brazil's worst recession in decades.

"(Nippon) does not see another solution other than a division of the company," the source said.   Continuación...