SAO PAULO Oct 7 The division between the two
controlling shareholders of Usinas Siderúrgicas de Minas Gerais
SA risks destroying the Brazilian flat steelmaker, a senior
executive at minority shareholder and rival Cia Siderúrgica
Nacional SA said on Friday.
The business relationship between controlling shareholders
Nippon Steel & Sumitomo Metal Corp and Techint Group,
marked by two years of disputes and mutual lawsuits, has
resulted in significant declines in the value of Usiminas, Luiz
Paulo Barreto, a corporate director at CSN, said in an
The dismal performance of Usiminas since Nippon
Steel worked to oust Techint from management in September 2014
is a sign that the strategy has failed, Barreto added. The
dispute has reached "irrational levels" and is penalyzing all
shareholders, including CSN, clients and, especially, employees,
"Every time that there's light at the end of the tunnel,
something happens to get us in the dark again," Barreto said.
"This endless dispute threatens to destroy Usiminas."
The rift reached new heights on Thursday, when a judge in
the state of Minas Gerais, where Usiminas is based, annuled the
outcome of a May 25 board meeting that replaced Nippon
Steel-backed Chief Executive Officer Rômel de Souza. Souza was
reinstated early on Friday.
São Paulo-based CSN owns 14 percent of Usiminas
common shares and 20 percent of the company's preferred stock.
Both companies compete in Brazil's flat steel sector, which
produces plate, slab and rolled steel products widely used by
car and home appliance makers.
Efforts to obtain comments from Nippin Steel and Techint
outside business hours were unsuccessful.
(Reporting by Tatiana Bautzer; Writing by Guillermo
Parra-Bernal; Editing by Bernard Orr)