Grappling with a whopping $7.23-billion debt, Brazil-based steel production and distribution company Gerdau SA is looking to sell off assets, including those in India.
The company might also dispose of certain assets in Central and South America, sources close to the development told BusinessLine .
“These assets are considered to be of low return and not very beneficial to the company’s overall operations. Following the sales, Gerdau would look at focusing on US and Brazil operations,” added the sources, who declined to be identified.
The specialty steel supplier produces flat steel and iron ore in Brazil, and is the largest producer of long steel in America, with steel mills across Brazil, Argentina, Canada, Chile, Colombia and Dominican Republic, among others.
Gerdau’s largest investment in India is a 3-lakh tonne specialty steel plant at Tadipatri in Andhra Pradesh.
In 2007, it had entered into a joint venture — called Kalyani Gerdau — with Kalyani Steels to acquire the plant from SJK Steel. While Gerdau and Kalyani held 45 per cent each, the previous owner and financial institutions held the balance 10 per cent.
Kalyani joint ventureIn 2013, Gerdau bought out Kalyani from the joint venture. The Porto Alegre-headquartered company might sell off its assets on a “selective basis”, one of the sources said, but did not provide the details of assets that would be on sale.
“The company often evaluates opportunities to optimise operations by assessing the best possible ways to develop and grow the business and generate greater returns to our shareholders,” the company’s Indian office said in an e-mail response.
“There is no decision taken for our operations in India. The business is improving day-by-day and reaching the strategic goals set for the year,” the mail added.
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