Chile steelmaker CAP delays capital increase
SANTIAGO, Nov 10 (Reuters) - Chile's biggest steel and iron ore producer, CAP CAP.SN, said on Monday it was delaying plans for a $550 million capital increase, citing falling commodity prices amid global financial crisis.
The company's shareholders approved the capital increase in August, in part to fund expansions in iron ore production, and CAP had also been looking to increase its steel output to capitalise on Asian demand.
"We took global economic conditions into account, specifically those of the international mining and steel sectors, which have changed significantly since the capital increase was approved and the present," CAP said in a note to the bourse regulator.
"We could not have predicted a situation like today's, with prices 40 percent below what they were at the shareholder meeting," it added.
CAP's shares were 6.3 percent firmer at 8,803 pesos each on the Santiago bourse in Monday afternoon trade, as a near $600 billion Chinese economic stimulus package lifted global bourses.
The company said in late October that it was reviewing plans to invest $2 billion to modernize its steel mills until turmoil in international markets subsided, and the capital increase was one planned source of funding. (Reporting by Manuel Farias; Editing by Walter Bagley)
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