CSN receives ten proposals to buy Tecon, in RJ

The Companhia Siderúrgica Nacional (CSN) received ten proposals from companies interested in buying Sepetiba Tecon, the container terminal that the group operates in the port of Itaguaí/RJ. All are for full acquisition of the asset.

Non-binding offers (the proposal can be changed and adjusted) were made by PSA, a world giant in port operations from Singapore, Chile’s SAAM, Wilson Sons, LOGZ, among others, as found by Valor. When contacted, the steel company (CSN) did not comment.

On the next step, CSN will select the three best proposals so that interested parties submit firm offers, which should take place between the end of this month and early February. A source close to the negotiations said that banks hired to seek interested parties were surprised at the high number of proposals, as there are infrastructure assets that don’t get any offers or, when they get, they’re just a few.

Sepetiba Tecon was valued at between BRL 1.2 billion and BRL 1.5 billion by a specialized firm hired by entrepreneur Benjamin Steinbruch’s steel company, who closely monitors the sales process.

The figures take into account that the terminal’s lease contract will be renewed by the government for another 25 years, process under analysis in the Secretariat of Ports (SEP). They understand that the anticipated extension of current contracts is the fastest way to enable investments in public ports.

The sale includes CSN’s efforts to reduce its heavy debt. In addition to the container terminal were put up for sale stakes in two hydroelectric power plants, the 17% share of the total capital of Usiminas and the surplus shares of MRS Logística railway. Goldman Sachs, Credit Suisse, Bradesco and Banco do Brasil banks were hired to negotiate the company’s assets.

CSN’s net debt closed the third quarter of 2015 – last balance sheet available – at R$23.4 billion (Brazilian Reais) and the group’s leverage is growing. The ratio between net debt and adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) rose to 6.6 times, versus 3.2 times on the same base in 2014.

The terminal is considered strategic. It has no draft restrictions, which sharpens the interest of operators who suffer from poorly performed dredging or whose bids are in courts – dredging in public ports is hired by the federal government.

Another benefit of Sepetiba Tecon is that it is far from an urban area, unlike Rio de Janeiro port, where there is an additional issue: navigation channel restrictions that limit the size of ships that are allowed to enter the port.

Sepetiba Tecon has 400 thousand square meters and 810 meters of docks. It has an annual capacity to handle 650,000 TEUs (standard 20-foot container). In 2014, it managed about 247 thousand TEUs, down 30% compared to the previous year.

Despite the economic crisis, which affects the volume of cargo, entrepreneurs understand that investing in the port sector is a long-term bet. “The crisis will not last forever and container volumes in Brazil are still very small; it will grow. You must have modern ports”, says one of the parties interested in the terminal.