Japan’s Nippon Steel, one of the shareholders of Brazil’s steelmaker Usiminas, will propose a BRL 1 billion capital injection to aid the struggling flats producer.
Despite the legal fights involving Usiminas’ shareholders Techint Group and Nippon, the Japanese group is willing to inject the capital alone, in case Techint refuses to participate. The proposal will be discussed on a Friday meeting this week and is seen by Nippon as the only solution to save the flats steelmaker from bankruptcy protection.
Techint said it’s in talks with other shareholders at Usiminas to find a solution. The company defends a more “limited” capital injection, as it wants to avoid Usiminas accumulating more debt.
Usiminas has some BRL 1.9 billion in debt due this year and BRL 2 billion in cash. A capital injection could give the steelmaker some breathing room to avoid filing for bankruptcy protection.
Usiminas largest creditors include JBIC (Japan Bank for International Cooperation), BNDES, Bradesco, Itaú, Santander and Banco do Brasil.