Brazilian mining analysts reacted well to steelmaker CSN's (NYSE: SID) Friday announcement it was selling a 40% stake in its Namisa iron ore mining subsidiary for US$3.12bn to a consortium comprised of Japanese and South Korean companies.
Both parties also signed contracts to supply and provide logistics services to all seven Asian steelmakers involved in the transaction. The official signing will occur October 21.
"I tip my hat to CSN's CEO Benjamin Steinbruch," Pedro Galdi, an analyst at SLW Corretora, told BNamericas. "Amid this crisis he was able to sell 40% of an asset for US$3.12bn."
Buyers were Japan-based Itochu Corporation, Nippon Steel Corporation, JFE Steel, Sumitomo Metal Industries, Kobe Steel, Nisshin Steel and South Korea-based Posco.
Luciana Leocádio of Ativa Corretora said she thought the result was positive for CSN because it ups the value of the company's mining assets during a period when demand is cooling off.
"The implicit value of the sale was US$7.8bn for 100% of Namisa, slightly below what was announced by the Japanese press but within expectations which hovered between US$7.0bn-10bn," Leocádio said in an Ativa report.
"The transaction was also positive because CSN retains control of Namisa and obtains cash to finance its investment plans," she added.
For André Segadilha, an analyst for Maxima Asset Management, the deal turned out to be "excellent" for CSN.
"The price was really good," Segadilha said in an interview.
The analyst added that CSN shares on the São Paulo stock exchange Bovespa rose by 20% on Friday morning minutes after the announcement was made.
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