RIO DE JANEIRO (Reuters) - Cia Siderúrgica Nacional SA is seeking a valuation of between $30 billion and $35 billion for iron ore unit Congonhas Minérios SA, in which the Brazilian steelmaker is in talks to sell a minority stake, a person familiar with the matter said on Wednesday.
According to the person, who asked for anonymity since the process is confidential, China Brazil Xinnenghuan International Investment Co is interested in buying 20 percent to 25 percent of Congonhas Minérios directly from CSN.
Talks are progressing slowly and may not result in a deal, the person said.
Reuters reported on Sept. 26 that both companies were discussing the transaction, whose outcome also hinges on the ability of CSN to secure long-term supply contracts from CBSteel, as the Chinese company is known.
A spokesman for CSN did not have an immediate comment. Efforts to reach media representatives for CBSteel were unsuccessful.
The stake sale in Congonhas Minérios is Chief Executive Officer Benjamin Steinbruch’s most ambitious asset divestiture plan yet for CSN, which has the largest debt burden among Brazilian steelmakers. Optimism over the sale has driven shares of São Paulo-based CSN up 7 percent over the past week.
Congonhas Minérios was created at the end of 2014, through the merger of CSN’s fully owned Casa de Pedra mine and Namisa, an ore production joint venture with six Asian companies. Casa de Pedra has one of Brazil’s best-quality iron ore reserves.
The six Asian companies that own a combined 12 percent of Congonhas Minérios would keep their stakes unaltered if a deal between CSN and CBSteel materializes, the person said.
They include Japan’s Itochu Corp, Nisshin Steel Co Ltd, JFE Steel Corp and Kobe Steel Ltd as well as Korea’s Posco Ltd and Taiwan’s China Steel Corp.
Additional reporting by Tatiana Bautzer in Rio de Janeiro; Editing by Chris Reese