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Venezuela Sells Major Steel Company

December 19, 1997

CARACAS, Venezuela (AP) _ The last major Latin American steel company still in state hands was sold Thursday for $1.2 billion to a consortium led by Argentina’s Siderar.

Government officials called the sale of 70 percent of Siderurgica del Orinoco, known as Sidor, a major step in their efforts to implement free-market economic policies and privatize money-losing companies.

``This is an historic day. Not just because of the actual sale of Sidor, but also because of the push it will give″ to free-market reform, Alberto Poletto, president of Venezuela’s privatization office, told reporters.

The steel workers’ union tried to block the privatization on the grounds that the selling price was too low.

The terms of the sale prohibit the new owners from firing anyone for a period of one year.

The sale was the biggest privatization in Venezuela since the government sold 40 percent of the CANTV telephone company to U.S.-based GTE for $1.8 billion in 1991.

Other members of the winning consortium, called Consorcio Siderurgia Amazonia Ltd., are: Venezuela’s Siderurgica Venezolana SACA; Mexico’s Hylsamex; Argentina’s Techint; Tubos de Acero de Mexico; Brazil’s Usinas Siderurgicas de Minas Gerais SA; and Venezuela’s Siderurgica de Angostura CA.

The government is reserving 20 percent of Sidor’s shares for purchase by the company’s employees and plans to float the remaining 10 percent in the local stock market.

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