Brazil Prices Big Steel Firm at $1.6 Billion
Brazil’s ambitious and controversial $18-billion privatization program came alive Wednesday as President Fernando Collor de Mello put a price tag of $1.6 billion on the giant steelmaker Usiminas, the first state company to be sold.
Bankers say the sale of the steel company, generally considered one of the government’s best assets, must be a success if Collor is to have any chance of meeting his target of raising $18 billion from privatization by early 1992.
Collor has made the sale of state-owned companies a key plank of his program to modernize Brazil’s struggling economy, and ministers at Wednesday’s brief ceremony in the presidential palace stressed the importance of what they termed “the end of government interference in the economy.”
Unlike equivalent state selloffs in richer countries, ordinary people are not the main targets for the Usiminas sale. The government plans a public offer of only 10% of the shares, and financial analysts expect banks and institutions to be the main customers for the rest.
About 86% of the company’s stock is for sale, the remainder being held by Nippon Usiminas, a vehicle for the Japanese investors who originally helped set the company up in the late 1950s.
The bulk of the stock will be sold in two auctions; the first of ordinary shares on Sept. 24 and the second of preferred shares on Oct. 28.
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