NOTICE THE TITLE. THIS IS A VERY PLAUSIBLE OUTCOME. COMPENSATE THE STOCKHOLDERS AND KEEP THE COMPANY AS A MINORITY PARTNER AS THEY HAVE DONE WITH STEEL. READ ALL THE WAY TO THE BOTTOM.

Venezuela's Chavez threatens to expropriate Sidor

By CHRISTOPHER TOOTHAKER Associated Press Writer

Source: Associated Press

http://news.findlaw.com/scripts/prin... CARACAS, Venezuela (AP) - President Hugo Chavez on Sunday threatened to expropriate Venezuela's largest steel maker unless the soon-to-be-nationalized company revises what he called excessive compensation demands.Chavez dismissed a request made by Sidor's parent company, Luxembourg-based Ternium SA, for US$4 billion (euro2.6 billion) in exchange for its 60 percent stake in the steel maker."I'm not going to pay $4 billion for that company," Chavez said during his weekly radio and television program. "If they don't want to reach an agreement with us, I'll sign an expropriation decree. I'll take immediate control."Company officials could not be reached for comment.Venezuelan Mining Minister Rodolfo Sanz said last week that Venezuela values Ternium's stake at about US$800 million (euro513 million), but plans to pay even less after subtracting the company's outstanding debts.Chavez has made nationalizing major industries a centerpiece of his socialist agenda. His government last year seized majority control of the country's largest telecommunications and electricity companies, and of joint oil ventures previously run by some of the world's largest oil companies.Earlier this month, along with Sidor, he announced plans to nationalize cement companies including Mexico's Cemex SAB, France's Lafarge SA and Switzerland's Holcim Ltd. The government is now negotiating sale terms with the companies, which will be allowed to stay on as minority partners.Ternium SA is controlled by Argentine-Italian conglomerate Techint Group. Ternium currently owns 60 percent of Sidor, while the Venezuelan government holds 20 percent. The remainder is held by current and former employees.Venezuela is still negotiating the price it will pay to shareholders, but could expropriate the company outright if Ternium fails to reach a deal in a final meeting scheduled for Monday.Officials had recently floated the possibility of buying a 40 percent share from Ternium to give the government a majority stake, while allowing Ternium and Sidor's employees to each keep 20 percent of the venture.But Sanz said that Ternium wants between US$3.2 billion (euro2 billion) and US$4.8 billion (euro3 billion) in exchange for its full 60 percent share.Sidor - whose formal name is Siderurgica del Orinoco - was privatized in 1998. It turns out about 85 percent of the 5 million metric tons (5.5 million U.S. tons) of steel Venezuela produces annually, according to the Belgium-based International Iron and Steel Institute.2008-04-28 11:04:34 GMT