DONG Energy says reviewing future of oil & gas business
COPENHAGEN, Oct 26 Danish utility DONG Energy said on Wednesday it is reviewing strategic options for the future of its oil and gas business.
RIO DE JANEIRO Aug 29 Brazilian steelmaker CSN may call off plans to buy ThyssenKrupp's money-losing CSA mill in Rio de Janeiro if the German steelmaker does not include a U.S. sister plant in the deal, a source with knowledge of the matter said.
Companhia Siderúrgica Nacional SA, as Brazil's No. 2 flat steel producer is known, is pushing ahead in negotiations to buy Steel Americas - comprised of the CSA slab mill in Rio and a processing plant in the U.S. state of Alabama - from ThyssenKrupp AG, said the source, who declined to be named because the talks are private.
ThyssenKrupp has struggled to sell its 73 percent stake in CSA, into which it poured more than $8 billion. The remainder of CSA is owned by Brazilian iron ore miner Vale SA.
"Without the Alabama plant, CSN is not interested in the deal," the source said.
Spokesmen for CSN and ThyssenKrupp declined to comment.
A purchase of ThyssenKrupp assets is seen as having negative implications for CSN, whose stock is down 35 percent since news of the bid emerged last September. Some analysts say the purchase would hurt CSN's earnings before interest, tax, depreciation and amortization, boost debt and distract management from undertaking more profitable projects.
According to a second source with knowledge of the situation, CSA could help CSN raise its steelmaking and port capacity, but such gains would make no sense without the Alabama plant. CSA has the capacity to produce up to 5 million tonnes of slab a year, part of which is sold to the Alabama mill for processing into flat products shipped mostly to carmakers.
Since the 1990s, when CSN's higher-value rolled steel products faced anti-dumping duties and tariffs in the United States and other countries, the company has sought to increase its capacity to process raw steel slabs outside Brazil.
In 2002 CSN bought a rolling mill in Terre Haute, Indiana. The mill receives slabs shipped from CSN's Presidente Vargas mill outside Rio and transforms the slabs into higher-value rolled products for the auto industry in the U.S. Midwest and South.
The CSA mill in Rio de Janeiro is also a slab mill. With the Alabama mill, it has sought to operate on a system similar to the Presidente Vargas-Terre Haute model.
While the first source said CSN expects to clinch a deal for the two plants by the end of September, the second source said talks have "cooled," though there are chances of progress in the future.
Vale wants ThyssenKrupp to partially reimburse it for some of the $550 million in extra costs that CSA has incurred over the past four years.
The sale of CSA to CSN hinges on a successful resolution of the Vale-ThyssenKrupp issues, the first source said.
CSA, whose construction cost $10 billion and which began operations in 2009, is Brazil's largest foreign investment project to date.
* Stock jumps as much as 3.8 pct to highest in 14 months (Add details of results)
* Q3 profit at 1.03 trillion won, vs 652 billion won year ago