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Tenaris announced that the Brazilian Superior Court of Justice (SCJ) rejected a motion filed by its subsidiary Confab and Ternium’s subsidiaries regarding a June 18, 2024 decision. The court ordered the T/T Group to pay an indemnification to Companhia Siderúrgica Nacional (CSN) related to their 2012 Usiminas participation acquisition.
The SCJ modified the monetary adjustment mechanism and capped attorney’s fees, reducing the potential payment. As of November 30, 2024, Confab’s revised potential payment would be approximately BRL548 million ($90 million). Tenaris maintains that CSN’s claims are unsupported and plans to continue appealing the decision.
Tenaris ha annunciato che la Corte Suprema di Giustizia brasiliana (SCJ) ha respinto un’istanza presentata dalla sua filiale Confab e dalle filiali di Ternium riguardante una decisione del 18 giugno 2024. La corte ha ordinato al Gruppo T/T di pagare un’indennità alla Companhia Siderúrgica Nacional (CSN) relativa all’acquisizione della partecipazione in Usiminas nel 2012.
La SCJ ha modificato il meccanismo di aggiustamento monetario e ha posto un limite alle spese legali, riducendo il pagamento potenziale. A partire dal 30 novembre 2024, il pagamento potenziale rivisto di Confab sarebbe di circa 548 milioni di BRL (90 milioni di dollari). Tenaris sostiene che le richieste di CSN non siano supportate e intende continuare a fare ricorso contro la decisione.
Tenaris anunció que el Tribunal Superior de Justicia de Brasil (SCJ) rechazó una moción presentada por su subsidiaria Confab y las subsidiarias de Ternium respecto a una decisión del 18 de junio de 2024. La corte ordenó al Grupo T/T pagar una indemnización a la Companhia Siderúrgica Nacional (CSN) relacionada con su adquisición de participación en Usiminas en 2012.
La SCJ modificó el mecanismo de ajuste monetario y limitó los honorarios de los abogados, reduciendo el pago potencial. A partir del 30 de noviembre de 2024, el pago potencial revisado de Confab sería de aproximadamente 548 millones de BRL (90 millones de dólares). Tenaris sostiene que las reclamaciones de CSN no están fundamentadas y planea seguir apelando la decisión.
테나리스는 브라질 최고 법원(SCJ)이 자회사인 Confab와 Ternium의 자회사들이 제출한 2024년 6월 18일자 결정에 대한 신청을 기각했다고 발표했습니다. 법원은 T/T 그룹에게 2012년 Usiminas 참여 인수와 관련하여 Companhia Siderúrgica Nacional(CSN)에게 보상을 지급하라고 명령했습니다.
SCJ는 금전적 조정 메커니즘을 수정하고 변호사 수임료를 제한하여 잠재적 지급액을 줄였습니다. 2024년 11월 30일자 기준, Confab의 수정된 잠재적 지급액은 약 5억 4천 8백만 BRL (9천만 달러)에 해당할 것입니다. 테나리스는 CSN의 주장들이 근거가 없다고 주장하며 결정에 대해 계속 항소할 계획입니다.
Tenaris a annoncé que la Cour Suprême de Justice brésilienne (SCJ) a rejeté une motion déposée par sa filiale Confab et les filiales de Ternium concernant une décision du 18 juin 2024. La cour a ordonné au Groupe T/T de verser une indemnité à la Companhia Siderúrgica Nacional (CSN) liée à leur acquisition de participation dans Usiminas en 2012.
La SCJ a modifié le mécanisme d’ajustement monétaire et a plafonné les honoraires d’avocat, réduisant le paiement potentiel. Au 30 novembre 2024, le paiement potentiel révisé de Confab serait d’environ 548 millions de BRL (90 millions de dollars). Tenaris soutient que les demandes de CSN ne sont pas fondées et prévoit de continuer à faire appel de la décision.
Tenaris hat bekannt gegeben, dass das brasilianische Oberste Gericht (SCJ) einen Antrag seiner Tochtergesellschaft Confab und der Tochterunternehmen von Ternium in Bezug auf eine Entscheidung vom 18. Juni 2024 abgelehnt hat. Das Gericht ordnete an, dass die T/T-Gruppe eine Entschädigung an Companhia Siderúrgica Nacional (CSN) zu zahlen hat, die mit ihrem Beteiligungserwerb an Usiminas im Jahr 2012 zusammenhängt.
Das SCJ hat den geldlichen Anpassungsmechanismus geändert und die Anwaltsgebühren gedeckelt, was die potenzielle Zahlung verringert. Zum 30. November 2024 würde die überarbeitete potenzielle Zahlung von Confab etwa 548 Millionen BRL (90 Millionen Dollar) betragen. Tenaris ist der Meinung, dass die Ansprüche von CSN unbegründet sind und plant, gegen die Entscheidung Berufung einzulegen.
Positive
- SCJ’s modification of monetary adjustment mechanism reduced the potential payment amount
- Attorney’s fees were capped, further lowering the total potential liability
Negative
- Court confirmed obligation to pay approximately $90 million in indemnification
- Legal defeat as motion to reverse previous court decision was rejected
- Ongoing legal uncertainty due to pending appeals
Insights
The Brazilian Superior Court of Justice’s ruling represents a significant legal setback for Tenaris, though with some mitigating factors. The court’s decision to modify the monetary adjustment mechanism and cap attorney fees has reduced the potential liability from what could have been a larger amount. The $90 million potential payout, while substantial, is manageable given Tenaris’s size and financial position.
The legal dispute stems from a complex 2012 acquisition structure and centers on whether a mandatory tender offer was required. The unanimous rejection of the clarification motion suggests prospects for immediate legal relief, though further appeals remain possible. The case highlights the ongoing risks of cross-border M&A transactions and the importance of careful consideration of local securities regulations.
The financial impact of this ruling warrants attention but isn’t severe enough to significantly impact Tenaris’s overall financial health. With a market cap of $20.9 billion, the potential $90 million liability represents less than 0.5% of the company’s value. The company’s decision to continue pursuing legal remedies suggests confidence in their position and could potentially lead to further reductions in the final payment amount.
However, investors should monitor this situation as it could impact quarterly results and potentially affect dividend policies or capital allocation decisions in the short term. The case also raises questions about potential similar claims in future M&A activities, which could affect strategic expansion plans in Brazil.
LUXEMBOURG, Dec. 06, 2024 (GLOBE NEWSWIRE) — Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) announced that the Brazilian Superior Court of Justice (SCJ) published today its unanimous decision to reject a motion of clarification filed by Tenaris’s subsidiary Confab, together with Ternium’s subsidiaries Ternium Investments and Ternium Argentina (all of which compose the T/T Group under the Usiminas shareholders agreement), that had sought to revert the June 18, 2024 SCJ decision ordering the T/T Group to pay Companhia Siderúrgica Nacional, or CSN, an indemnification in connection with their 2012 acquisition of a participation in Usiminas.
Notwithstanding the foregoing, the SCJ unanimously resolved to modify the applicable monetary adjustment mechanism and to cap the applicable attorney’s fees, thereby lowering the aggregate amount that would be payable by the T/T Group if CSN ultimately prevails in its claims. Assuming monetary adjustment through November 30, 2024, and BRL 5 million in attorney’s fees, in each case as determined pursuant to the SCJ decision published today, the revised aggregate amount potentially payable by Confab would be of approximately BRL548 million (approximately $90 million).
Tenaris continues to believe that all of CSN’s claims and allegations are unsupported and without merit, and that in connection with the Usiminas acquisition the T/T Group was not required either to launch a tender offer or to pay indemnification to CSN. Accordingly, Confab intends to continue to defend its rights vigorously and to file all available motions and appeals against the SCJ decisions that ordered an indemnification payment.
Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies.
Tenaris is a leading global supplier of steel tubes and related services for the world’s energy industry and certain other industrial applications.
Giovanni Sardagna
Tenaris
1-888-300-5432
www.tenaris.com
FAQ
What is the amount Tenaris (TS) might have to pay in the Brazilian court case?
Tenaris’s subsidiary Confab might have to pay approximately BRL548 million (about $90 million), including monetary adjustments through November 30, 2024, and BRL 5 million in attorney’s fees.
Why is Tenaris (TS) facing an indemnification payment in Brazil?
The indemnification payment is related to Tenaris’s 2012 acquisition of a participation in Usiminas, following a court decision in favor of Companhia Siderúrgica Nacional (CSN).
What was the Brazilian Superior Court of Justice’s decision regarding Tenaris (TS) in December 2024?
The court rejected Tenaris’s motion to reverse the June 18, 2024 decision ordering indemnification payment, but modified the monetary adjustment mechanism and capped attorney’s fees, reducing the total potential payment.
