(Recasts top add details on CSN’s Usiminas investment, comments throughout)
SAO PAULO, July 13 (Reuters) - Steelmaker Cia Siderúrgica Nacional SA will sell its stake in rival Usinas Siderúrgicas de Minas Gerais SA, Brazil’s No. 2 producer of flat steel, only after it minimizes losses on its 4 billion-real ($1.22 billion) investment, executives said on Wednesday.
However, the exit of the investment in Usiminas will happen within a timetable imposed by antitrust watchdog Cade, executives including Luiz Carlos Barreto, head of institutional relations at CSN, and company lawyers said at a news conference. The deadline for CSN’s exit from Usiminas remains confidential.
São Paulo-based CSN owns 14 percent of Usiminas common shares and 20 percent of the company’s preferred stock, an investment currently valued at 270 million reais. Both companies compete in Brazil’s flat steel sector, which produces plate, slab and rolled steel products widely used by car and home appliance makers.
CSN says the business relationship between the top two shareholders in Usiminas, Nippon Steel & Sumitomo Metal Corp and Techint Group, has led to significant declines in the value of the stake.
In the latest chapter of an ongoing shareholder battle, lawyers working for CSN said at the news conference that there is evidence of collusion between Nippon Steel and Techint, which over the past five years might have used contracts at Usiminas to maintain power. Currently, Nippon Steel and Techint are at odds over the direction of Usiminas, which is in its worst crisis in decades.
Nippon Steel did not comment. Techint did not have an immediate comment.
Shares of CSN fell 3.3 percent to 9.23 reais, the first decline in four sessions.
Preferred shares of Usiminas were down 2.4 percent at 2.13 reais, while common shares slumped 2.8 percent to 6.91 reais on Tuesday.
$1 = 3.2861 Brazilian reais Reporting by Guillermo Parra-Bernal; Editing by Chizu Nomiyama and Steve Orlofsky