Techint Said to Seek $1.05 Billion Loan for Usiminas Steelmaker Purchase
Techint Group, through its Confab Industrial SA (CNFB4) and Ternium SA (TX) units, is trying to obtain two syndicated loans totaling as much as $1.05 billion to finance the acquisition of a stake in Usinas Siderurgicas de Minas Gerais SA (USIM5), according to two people familiar with the talks.
Confab, a Brazilian maker of steel tubes controlled by Tenaris SA, a subsidiary of Techint, hired HSBC Holdings Plc (HSBA) as the lead bank in a five-year $350 million loan, said the people, who asked not to be identified because the syndication process has just begun. Luxembourg-based Ternium, Latin America’s second-largest steelmaker, hired HSBC, Banco Santander SA (SAN), JPMorgan Chase & Co, Citigroup Inc. (C) and Credit Agricole SA to lead a separate five-year loan of $700 million, the people said.
The rest of the $2.7 billion needed to acquire the stake in Belo Horizonte, Brazil-based Usiminas will come from cash on hand.
Techint said in November it agreed to pay 5.03 billion reais ($2.7 billion) for the 27.7 percent voting stake in Usiminas, Brazil’s second-largest producer of steel. The controlling shareholders group, which includes Nippon Steel Corp., will have 63.9 percent of voting rights.
Since the announcement, Techint has purchased 139.7 million ordinary shares of Usiminas from Camargo Correa SA, Grupo Votorantim and Usiminas’s workers pension using cash on hand a bridge loan from Banco BTG Pactual SA, the adviser for Ternium and Confab, said the people. That loan will be refinanced with the two syndicated loans the company is negotiating.
Gustavo Pernalete, a spokesman for Ternium in San Nicolas, Argentina, declined to comment. Confab didn’t return an e-mail seeking comment.
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