October 07, 2008

Mr Chavez sets next Tuesday as deadline for Sidor

It is reported that Mr Hugo Chavez ha set next Tuesday as a deadline for Ternium to accept the compensation offered for its stake in Sidor. Ternium SA demanded USD 4 billion in exchange for its 60% stake, which the government claims is only worth USD 800 million.

Venezuela's El Universal reported that Mr Chavez said that "If no fair settlement is reached regarding this issue by next Tuesday, I will sign a nationalization decree and order the company's takeover."

During his weekly radio and television program Aló Presidente, Mr Chavez declared that "I will not pay that amount because that company is not worth it. Sidor used to be larger before."

Mr Chavez instructed Venezuela's vice president Mr Ramon Carrizalez to meet with Mr Rodolfo Sanz minister of basic industries and mining and Sidor representatives to establish a fair price for the company.

Ternium currently owns 60% of Sidor, while the Venezuelan government holds 20% with the remaining 20% held by current and former employees. The government recently offered to buy a 40% share from Ternium, which would give Venezuela a majority stake, while allowing Ternium and Sidor's employees to each keep 20% of the venture.