26 de septiembre de 2014 / 14:38 / en 3 años

UPDATE 2-Brazil's Usiminas dismisses CEO Eguren in boardroom battle

(Recasts, adds detail on ownership)

By Stephen Eisenhammer

RIO DE JANEIRO, Sept 26 (Reuters) - Brazilian steelmaker Usiminas said on Friday its board had dismissed Chief Executive Julian Eguren in a divided vote, as two controlling stakeholders clashed over the appointment of senior managers in the firm.

The dismissal appears to mark a significant deterioration of relations between the two main companies that control the Brazilian firm, Japan’s Nippon Steel & Sumitomo Metal Corp and Luxembourg-based Ternium Steel.

Two of Eguren’s subordinates were also dismissed, all of whom had originally been appointed by Ternium, part of the Italian-Argentine conglomerate Techint. The news sent Usiminas shares down 3.5 percent.

“Nippon Steel has effectively forced the removal of Mr. Eguren against the wishes of Techint,” Alex Hacking, analyst at Citi, wrote in a note to clients.

Nippon Steel was not immediately available for comment.

Eguren, an Argentine who took the helm in 2012, was widely seen as having helped turn around the steelmaker, formally known as Usinas Siderurgicas de Minas Gerais SA, at a time of global oversupply of the world’s most-used metal. Cash flow doubled in the two years Eguren ran the firm.

“We consider these management changes as negative news for Usiminas,” Leonardo Correa, analyst at BTG Pactual, wrote in a note to clients.

“The current CEO had been responsible for an operational turnaround at the company, so some will question future execution of the company,” he added.

Ternium said in its own statement that the dismissal of the executives was due to a controversy within Usiminas over senior management appointments. It said it intended “to take all reasonable actions to protect its rights and investment in Usiminas.”

The dismissal was passed after the chairman, a Nippon Steel representative, resolved a five-to-five vote on the board.

Romel Erwin de Souza, director of technology and quality, will take over as CEO on a temporary basis.

Paolo Bassetti, vice-president of subsidiaries, and Marcelo Chara, vice-president of industrials, were also dismissed in the vote.

Ternium, along with its conglomerate partner Tenaris, bought 43.3 percent of Usiminas’ voting rights for $2.2 billion in 2011. Nippon Steel has 46.1 percent of the company’s voting rights, with the rest owned by the Usiminas pension fund.

Reporting by Stephen Eisenhammer; Editing by Chizu Nomiyama and Dan Grebler

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