Oil and Gas

Venezuela says Ternium Sidor stake worth $800 mln

CARACAS, April 26 (Reuters) - Venezuela has estimated a value of about $800 million for Argentine steelmaker Ternium’s stake in Venezuelan steel producer Sidor, which leftist President Hugo Chavez is nationalizing.

The figure is around a third of the minimum Ternium had asked for, which could complicate Chavez’s effort to take over the nation’s largest steelmaker without creating a conflict with the allied Argentine government of Cristina Fernandez.

“We have preliminarily concluded that the value of the shares of Ternium group is close to $800 million,” said Basic Industries and Mining Minister Rodolfo Sanz in televised comments.

He said Ternium TX.N, which holds a 60 percent stake in Sidor, had asked for between $3.2 billion and $4.8 billion dollars, which he said "does not correspond to the preliminary analysis we have carried out."

Sanz said from the $800 million figure, the government would subtract outstanding financial and labor debts and any debts that might result from lawsuits against Sidor.

He said one suit, a dispute over the price of natural gas Sidor pays to state oil company PDVSA, could add $200 million to those outstanding debts.

Chavez this month announced the takeover of Sidor following repeated worker strikes over a prolonged labor dispute, renewing a nationalization drive launched last year that led to takeovers in the energy and telecommunications sectors.

Sidor workers and the government each own 20 percent of Sidor, which in 2007 produced 4.3 million tonnes of liquid steel.

Sanz said the government was advancing in collective contract talks with the unions, which have repeatedly called brief strikes this year in disputes with Sidor’s management over wages and working conditions.

The Sidor decision came less than a year after the company agreed, in a bid to avoid nationalization, to pay the state higher prices for raw materials and supply more steel to the domestic market.

Chavez last year nationalized the holdings of U.S. telecom giant Verizon VZ.N and power generator AES AES.N, making financial compensation to the companies that analysts said were fair.

Reporting by Deisy Buitrago, writing by Brian Ellsworth, editing by Sandra Maler