Venezuela will determine a “fair” price and pay for the 2010 nationalization of Venezuelan steelmaker Siderurgica del Turbio SA, said industry minister Ricardo Menendez.
The Venezuelan government hasn’t dismissed workers from the company known as Sidetur after it took control of its facilities, Menendez said today on state television. Sidetur was a unit of Caracas-based Siderurgica Venezolana Sivensa.
“We’ll fight anyone who tries to sabotage the nationalization process in court,” he said. “We’re going to determine a fair price and pay it.”
Venezuela’s government took control of the company’s operations and bank accounts this month, Sidetur’s board said yesterday in a statement published in El Nacional newspaper. The takeover is illegal because the government hasn’t yet paid for the asset seizure, according to the statement yesterday. The company has $76.25 million of outstanding bonds due in 2016 that pay a coupon of 10 percent.
Sidetur’s assets have a book value of 1.2 billion bolivars ($288 million), and the company will buy back its debt once it settles with the government, Oswaldo Sahmkow, a finance official at Sidetur’s parent company Sivensa, said last year.
The price on the bonds rose 5.85 percent to 86 cents on the dollar today at 1 p.m. in Caracas, the highest price since April 3, according to data compiled by Bloomberg.
“It would be viewed badly by the market if the government doesn’t pay the debt,” Francisco Ghersi, co-managing director of Caracas-based Knossos Asset Management who owns some of the bonds, said today in an e-mail. “It’s a small amount compared to Venezuela’s total external debt.”
The government has to buy back the bonds and pay 101 cents on the dollar in the case of nationalization, according to the bond prospectus, said Ghersi. The company paid the latest coupon due on the bond on Oct. 20, he said.
Venezuelan President Hugo Chavez, who nationalized heavy crude-oil ventures with Exxon Mobil Corp. and ConocoPhillips in 2007, has continued to take over companies in the food, cement and telecommunications industries.
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