March 14 (Bloomberg) -- Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-largest steelmaker, rose to a highest in almost seven months on speculation the company may sell manufacturing subsidiaries and use the cash to develop its mining business.
Usiminas, as the Belo Horizonte, Brazil-based company is known, climbed 5.3 percent to 13.39 reais in Sao Paulo today, its highest since Aug. 23. It was the best performer on the benchmark Bovespa index, which dropped 0.2 percent.
The company may resume plans to sell its subsidiaries Usiminas Mecanica and Automotiva Usiminas, O Estado de S. Paulo reported, citing an unidentified person close to the company’s administration. The units may be worth 2.5 billion reais ($1.4 billion), and the money would be used to invest in the company’s mining business, according to the newspaper.
“This possible sale would reinforce the cash position of Usiminas,” William Castro Alves, an analyst at brokerage XP Investimentos, said in a telephone interview from Rio de Janeiro. “It would free up resources to develop the mining business better, which has saved the company’s day recently.”
Usiminas Mecanica makes capital goods for steel structures, bridges, railway cars and other industries, the company said in a recent regulatory filing. Automotiva Usiminas manufactures auto parts.
An Usiminas official in Belo Horizonte said the company won’t comment when contacted by Bloomberg News today.
Shares of Usiminas rose 32 percent this year, beating the Bovespa’s 20 percent gain.
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