Venezuela:
New sales modality for Fesilven
September 1998

The Venezuelan Congress authorized a privatization agreement to sell the ferrosilicon company Fesilven, under the modality of a "sale of operating assets" which allows the investor to contract certain commitments and obligations so that the company’s operations can continue and also to implement investment plans. The Venezuelan Investment Fund (FIV) and the Corporación Venezolana de Guayana (CVG), the latter responsible for handling the mining companies in the country, recommended this new modality because of the financial crisis at Fesilven. The government will soon begin the third round of due diligence so that pre-classified investors can review the terms and conditions for the bid and obtain updated information regarding Fesilven. It is expected that the process will conclude before the end of 1998.

CVG-VENEZOLANA DE FERROSILICIO, C.A. (C.V.G.-Fesilven) is a company that produces ferrosilicon, the raw material used to manufacture steel and silicon alloys used among others as rust removers. The company was established in 1973 as a private company called Compañía Venezolana de Ferroaleaciones Bozel, C.A: (VENBOZEL, C.A.) with a minority share by CVG and a majority share of a French group. In 1979, the name was changed to CVG VENEZOLANA DE FERROSILICIO, C.A. (CVG-FESILVEN) and the public sector obtained a majority share.

The main consumers of the production of Fesilven are the United States, Japan and Europe, through its steel industries and foundries, and to a lesser degree, the aluminum and electrode industries. Other export markets are Korea, Mexico, Colombia, Cuba and Trinidad.

The groups comprising the current registry of companies that have pre-classified for the process are: Compañía Minera Autan, S.S. de CV (Mexico); Hornos Eléctricos de Venezuela, S.A. Hevensa (Venezuela); Arbed Américas Inc. (USA); Sigurd Jensen & Co./Transworld Metals (US/England) and Elkem, ASA (Norway).

 

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