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Steel Firm Seeks Infrastructure Partners to Reduce Leverage
2 Aug
Summary
- Considering selling 20-40% stake in logistics assets to raise BRL8 billion
- Prioritizing value over volume, focusing on higher-added-value steel products
- Aiming to reduce net debt/EBITDA ratio to below 3.0 by end of 2025
According to the earnings call held on August 2, 2025, the Brazilian steel company is actively seeking infrastructure partners to help manage its logistics assets. The company currently has seven logistics assets, with two more under construction, and is in discussions with potential partners to sell a 20% to 40% stake. This move could inject BRL8 billion in liquidity and help reduce the company's leverage.
Regarding the company's steel business, the executive team acknowledged the challenges posed by chaotic steel imports in Brazil, which have impacted the market. The company is working on anti-dumping measures and expects the government to act faster on technical grounds. To address this, the firm is prioritizing value over volume, focusing on higher-added-value steel products.
The company has also taken several measures to improve cost efficiency in the steel segment, including shutting down a blast furnace, optimizing coke usage, and improving sintering production. These efforts have led to cost reductions, and the company expects further improvements in slab costs in the coming quarters.
The company's strategy for deleveraging includes a focus on capital expenditures for expansion and productivity, as well as bringing in partners for energy and other initiatives. The firm's goal is to reduce its net debt-to-EBITDA ratio to below 3.0 by the end of 2025.
