RIO DE JANEIRO, Oct 29 (Reuters) - Wednesday’s earnings conference call for Brazilian steelmaker Usiminas was most notable for the absence of any comments or questions on perhaps the biggest issues currently facing the company.
Namely, who will be the next chief executive and how will a boardroom battle between its two controlling shareholders be resolved?
A spokeswoman for Usinas Siderúrgicas de Minas Gerais SA , as the company is formally known, told Reuters emphatically “no,” the company had not warned analysts against posing questions on the subject.
It is common practice for companies to hold separate calls for analysts and reporters to discuss results. Wednesday’s call was for analysts and investors, so reporters were allowed to listen in but could not ask questions.
The dispute between controlling shareholders and who would lead the company were not mentioned on the call, neither by analysts nor by Usiminas executives.
Instead, analysts focused on the outlook for steel demand, the iron ore price and the impact of the weakening Brazilian currency, also important issues for the firm.
The silence means the market remains in the dark about the company’s near-term future. During, and just after, the call Usiminas’ share price slipped an additional 1 percent, extending losses to 4 percent over Tuesday’s close.
The tug of war between its two major shareholders Nippon Steel & Sumitomo Metal Corp and Ternium SA broke out last month and resulted in the resignation of former CEO Julian Eguren.
Japan’s Nippon accuses Eguren of receiving illegitimate payments, while Ternium, where Eguren was previously an employee, objects to the dismissal and has pushed for his reinstatement.
Romel Erwin de Souza, head of technology, was appointed temporary CEO while also carrying on with his usual job. Since then no comment has been made on the progress for appointing someone permanently.
Ternium has responded by increasing its stake in Usiminas and unsuccessfully fighting Eguren’s dismissal in court. Ternium ally, Tulio Chipoletti, was also appointed as senior industrial vice president on a temporary basis last week.
The uncertainty surrounding who is in control at Usiminas comes at a difficult time in the Brazilian steel industry, with demand faltering as auto-industry production falls.
Usiminas swung into the red in the third quarter, posting a net loss of 24 million reais ($9.8 million) on Wednesday.
“With fundamentals likely to remain weak throughout 2015, we believe a quick resolution to shareholder conflicts is increasingly important to improve investor confidence,” Leonardo Correa, analyst at BTG Pactual, wrote in a note to clients.
$1 = 2.46 reais Reporting by Stephen Eisenhammer; Editing by Chris Reese