1. Home
  2. / Industry
  3. / A pig in a poke? Steel giant ArcelorMittal buys Companhia Siderúrgica do Pecém for more than R$ 11 billion and discovers that CSP defaulted on almost R$ 300 million to companies in Ceará
AISP-GEDOC CE reading time 4 min read

A pig in a poke? Steel giant ArcelorMittal buys Companhia Siderúrgica do Pecém for more than R$ 11 billion and discovers that CSP defaulted on almost R$ 300 million to companies in Ceará

Written by Flavia Marinho
Published 06/09/2022 às 17:01
ArcelorMittal - steel - price - northeast - vacancies - construction - Valley - steelworks - debts - defaults
Companhia Siderúrgica do Pecém bought in June of that year by ArcelorMital for more than R$ 11 billion, from a millionaire default on companies from Ceará – Imagem CSP

Purchase of CSP by ArcelorMittal rekindled hope about the progress of the lawsuits in court. Companies from Ceará were subcontracted by Korean firms linked to Posco Engenharia e Construção do Brasil.

Companhia Siderúrgica do Pecém, sold to the giant ArcelorMittal, in June this year for US$ 2,2 billion, leaves a millionaire default of US$ 50 million. According to Journal of Northeast, at least five companies from Ceará, which helped build one of the largest private investments in the history of Ceará, continue to receive no payment for the services provided between 2013 and 2015.

According to Journal of Northeast, with lawsuits that have been dragging on for years in court, one of the fears reported by these businessmen is that the departure of shareholders will further impede the lawsuits involving Vale and Posco Engenharia e Construção do Brasil.

Scaffolding leasing company suffered a BRL 20 million default

Maqloc, one of the subcontracted companies by Braco and Dongyang, for the leasing of industrial scaffolding used in the construction of the CSP, suffered a millionaire default. In addition to the service that was not paid for, he had to deal with the loss of equipment that disappeared. Today, the updated debt totals R$ 20 million.

Maqloc is trying to deal with accumulated liabilities as a result of debt and has had to take “several steps backwards”. while the case drags on in court.

According to Journal of Northeast, Maqloc's lawsuit against Dongyang, CSP and Posco Engenharia e Construção do Brasil has been in the 2nd District Court of São Gonçalo do Amarante since 2016.

Dongyang Construction do Brasil and Braco owe more than R$5 million to Magna Locações

For César Jucá, president of Magna Locações – which faces problems similar to Maqloc's, the announcement of the purchase of CSP by ArcelorMittal somewhat rekindled hope about the progress of the lawsuits in court. “We had no call. We are wanting what is ours. We always have this hope that one day we can get that money back”.

The debts with Dongyang Construction do Brasil and Braco, together, exceed R$ 5 million. About 20% of the amount represents overdue invoices and the other 80% corresponds to equipment that was also retained and was never recovered.

Sought by the report of the Journal of Northeast In order to issue an opinion and on the control of the entry and exit of equipment, the “ZPE Ceará, a subsidiary company of Complexo do Pecém, informs that it does not have records of fiscal movement, related to the service mentioned above, and consequently it also does not have records of the mentioned movement of equipment".

Even the cement supplied was not paid for

Apodi, which supplied cement for the work starting in 2015, also took a default from Dongyang, which is currently R$ 2,38 million. According to Apodi, in May of this year, an order was issued “for personal subpoena of the defendant to regularize the procedural situation, considering resignation of mandate. And, at the moment, Cimento Apodi is waiting for a return”.

Other millionaire debts involving Dongyang and Braco. Cordeiro Guindastes has open lawsuits that have been dragging on since 2014 in the courts of São Gonçalo do Amarante and Fortaleza, both stopped and currently at R$ 4 million.

$50 million – the biggest vest ever!

According to the lawyer Frederico Costa, hired to mediate the final receipts of the CSP construction contract, the biggest known debt involving the construction period of the CSP, is from Posco Engenharia e Construção do Brasil. According to him, the outstanding debt is US$ 50 million.

“And one of the partners, the majority, Vale, was having problems making this payment, claiming precisely that Posco was not fulfilling its responsibilities towards third parties, or at least it was not managing to demonstrate it”, explains Frederico.

“Then Vale would say: 'no, you pay and then I'll pay you', so there was a problem. My job was to try not to get into a fight. Posco did not want arbitration. Work was done, they received the money, they didn't pay the workers here, not even me”, he laments.

The report by Journal of Northeast He tried to contact Posco Engenharia e Construção do Brasil and Vale but was unsuccessful.

Did the steel giant ArcelorMittal know about the default when it bought CSP, or did it take a beating?

The lawyer believes it is possible that ArcelorMittal acquired CSP without knowing what he calls “hidden liabilities”. “This is when the buyer does not know everything that the company he bought owes. It’s the nature of hidden liabilities to be hidden,” he explains.

According to him, “it won't be a surprise if ArcelorMittal soon announces an arbitration to recalculate the purchase values ​​because the partners would have hidden debts, hidden liabilities”, says Frederico Costa.

Sought by the report, ArcelorMittal said it will not comment on the matter and stressed that "it did not take control of CSP".

“The company will not comment on the matter. ArcelorMittal did not take control of CSP. The consummation of the transaction is subject to the fulfillment of precedent conditions, among them the obtaining of regulatory approvals, including that of the Administrative Council for Economic Defense (Cade)”, says the note from ArcelorMittal.

credits – Ingrid Coelho/Journal of Northeast

Flavia Marinho

Flavia Marinho is a postgraduate engineer with extensive experience in the onshore and offshore shipbuilding industry. In recent years, she has dedicated herself to writing articles for news websites in the areas of industry, oil and gas, energy, shipbuilding, geopolitics, jobs and courses. Contact her for suggestions, job openings or advertising on our portal.

Share across apps