The sales process of Black Hill entered a new stage. The exclusivity period for negotiating that benefited National Steel Company (CSN), from Brazil, expired on August 12 and was not renewed. And although negotiations with the Brazilian group remain alive, this situation opened the doors for other interested parties in the Olavarría cement plant to submit their proposals.
Among the other candidates is the Argentine businessman Marcelo Mindlinowner of the construction company Sacde, who has not given up on his ambitions to take over the former Fortabat company in order to vertically integrate all of his company’s operations.
Negotiations with the Brazilian company CSN for the transfer of Loma Negra by the also Brazilian Camargo Correa group seemed totally on trackafter a first extension of the exclusivity period for negotiating.
But the discussion advances at a slow pace Because not only is the purchase of Loma Negra being discussed there, but also the entire share package of InterCement, the holding company that controls Camargo Correa’s cement business in Brazil and Argentina.
The last renewal of the exclusivity period was at the end of July, as the company indicated at the time in a communication to the Buenos Aires and Sao Paulo stock exchanges. But the same note clarified that “the term of validity will be automatically renewed until August 12, 2024.” as long as the parties actively demonstrate their commitment”.
Although there was no official communication this time, Scope was able to confirm that the deadline expired on August 12 and was not extended due to lack of agreement. But he was also able to learn that the fact that the deadline had expired does not imply that negotiations with CSN will not continue.
For now, InterCement is now hands-free to receive and evaluate offers from other interested parties. In any case, it was made known from the beginning at the central offices in Brazil that the preferred candidate was always CSN given that its offer was more comprehensive of all the holding company’s operations and did not only include the assets in Argentina.
Good results from the operation in Argentina
InterCement is burdened by a debt totaling around US$1.6 billion. Half of its liabilities are concentrated in three Brazilian banks: Bradesco, Itaú and Banco do Brasil. The attitude of these banks will be key to the future of the negotiations, both consensual and judicial, as well as a future sale to the CSN group.
In recent months, it has not been able to meet all its liabilities in a timely manner, and that is why in mid-July it adopted a series of measures to negotiate with its financial creditors and protect its assets until its completion. divestment strategy in all geographies, including Argentina.
The decision to leave the country was made some time ago, regardless of the results of the Loma Negra operation in recent quarters. showed obvious improvements despite an adverse economic context.
The cement company presented a few days ago the closing of results as of June 30, 2024. During this semester, it had net sales income of $233,057 million, with a year-on-year increase of 171.4%. And there was also a notable increase in net profit, which climbed to $38.366 billion, with an increase of 194.9% against the same period in 2023.
These figures were recorded despite the negative impact on cement shipments due to the halt in public works since Javier Milei’s government took office.
“The cement industry would seem to have passed the lowest point in terms of shipments in March, seeing since then a sequential recovery in the level of activity. The first achievements in economic terms of the Government’s stabilization plan, such as the abrupt fall in inflation, the fiscal surplus and the lowering of the reference rate are creating a context that makes it possible to foresee a more marked recovery in demand for the second half of the year,” Loma Negra said in the report submitted to the National Securities Commission.
The optimistic vision of the CEO of Loma Negra
Sergio Faifman, CEO of Loma Negra, highlighted the company’s results and raised optimistic expectations for the short term. “We are pleased to present another set of solid results. Despite the year-over-year decrease in volume, our business achieved an expansion of the Adjusted EBITDA Margin that demonstrates our great capacity for efficiency and flexibility in adapting to changing market conditions.” challenging scenarios and our constant focus on profitability.”
In this regard, he reinforced the commitment to current economic management: “As the stabilization program implemented by the Milei administration begins to show positive results in reducing inflation and consolidating a fiscal surplus, Construction activity is beginning to show signs of recovery. Cement volumes have shown a positive trend of continued sequential growth since hitting a low in March.”
“Although economic challenges persist, we believe that we are in a period of transition. As macroeconomic variables stabilize and the economic environment improves, We expect to see a much stronger recovery. Meanwhile, our focus is on efficiency and cost control, while maintaining our leadership position and our commitment to customers and suppliers,” he added.
“We are optimistic that this positive trend in the industry will be consolidated, as July’s dispatch figures already show a significant improvement. Therefore, we have strong reasons to expect a more significant recovery in the second half of the year,” he concluded.
Source: Ambito
