Venezuelan President Hugo Chavez on Sunday threatened to expropriate the country’s largest steelmaker unless the soon-to-be-nationalized firm revises what he called its excessive demands for compensation.
Chavez dismissed a request made by Sidor’s parent company, Luxembourg-based Ternium SA, for US$4 billion in exchange for its 60 percent stake in the steelmaker.
“I’m not going to pay US$4 billion for that company,” Chavez said during his weekly radio and television program. “If they don’t want to reach an agreement with us, I’ll sign an expropriation decree. I’ll take immediate control.”
PHOTO : AP
Chavez ordered Sidor nationalized earlier this month, siding with workers who had sought improved salaries and benefits.
Ternium SA is controlled by Argentine-Italian conglomerate Techint Group. Ternium owns 60 percent of Sidor, while the Venezuelan government holds 20 percent. The remainder is held by current and former employees.
Venezuela was still negotiating the price it would pay to shareholders, but could expropriate the company outright if Ternium failed to reach a deal in a final meeting scheduled yesterday.
Officials had recently floated the possibility of buying a 40 percent share from Ternium to give the government a majority stake, while allowing Ternium and Sidor’s employees to each keep 20 percent of the venture.
But Venezuelan Mining Minister Rodolfo Sanz said last week that Ternium wants between US$3.2 billion and US$4.8 billion in exchange for its full 60 percent share.
Venezuela values Ternium’s stake at about US$800 million, but the government plans to pay even less after subtracting the company’s outstanding debts, Sanz said.
Sidor was privatized in 1998. It turns out about 85 percent of the 5 million tonnes of steel produced annually in Venezuela, the Belgium-based International Iron and Steel Institute said.
Chavez has made nationalizing major industries a centerpiece of his socialist agenda. His government last year seized majority control of the country’s largest telecommunications and electricity companies?nd of joint oil ventures previously run by some of the world’s largest oil companies.
Earlier this month, he announced plans to nationalize cement companies, including Mexico’s Cemex SAB, France’s Lafarge SA and Switzerland’s Holcim Ltd. The government is now negotiating sale terms with the companies, which will be allowed to stay on as minority partners.
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