(Updates with Metalúrgica comments from paragraph 1)
SAO PAULO, Oct 1 (Reuters) - Matalúrgica Gerdau SA, which controls Brazilian steelmaking group Gerdau SA, said on Thursday that consideration of a potential share offering is preliminary and has yet to be decided, responding to a newspaper report saying the plan could help fetch 1.5 billion reais ($380 million) from investors.
Valor Econômico newspaper, citing unidentified market sources, said Metalúrgica Gerdau could launch a so-called restricted-effort offering in which a yet to determine amount of new stock will be put up for sale among existing shareholders and a limited number of outside investors.
Public offerings with restricted efforts differ from standard equity offerings in that a company does not have to request registration of the plan with securities industry watchdog CVM, only qualified investors can participate, and the deals cannot be marketed through road shows or the media.
In a securities filing, Metalúrgica Gerdau said management and shareholders alike are constantly “analyzing alternatives to make the firm’s capital structure more optimal.”
The plan comes as the Gerdau group and other Brazilian steelmakers grapple with a high debt burden, which has grown substantially as the real shed about one-third of its value against the U.S. dollar this year.
Proceeds from the offering would be used to repay debt that Porto Alegre, Brazil-based Metalúrgica Gerdau owes to Grupo BTG Pactual SA, the largest independent investment bank in the country, Valor said.
The Gerdau Johannpeter family, which controls Metalúrgica, could subscribe around two-thirds of the offering, with BTG Pactual also taking part in it as an underwriter, the paper reported. BTG Pactual could help prop up the offering by buying shares, Valor said, without specifying how.
The bank declined to comment.
Shares of Metalúrgica Gerdau are down 74 percent this year, in line with other steel shares that are being hammered by the impact of slowing growth in China, declining iron ore and steel prices and Brazil’s worst recession in a quarter century.
Shares of Metalúrgica rose less than 0.1 percent to 2.96 reais in early Thursday trading.
$1 = 3.9494 Brazilian reais Reporting by Guillermo Parra-Bernal Editing by W Simon