AVB seeks investors to support expansion plan
Steelmaker Aço Verde do Brasil (AVB) says it wants to attract "strategic partners" in order to grow without compromising the company’s cash reserves and financial leverage ratio. The company has hired UBS to launch an international search for partners in the steel mill — private equity firms, institutional investors, and investment funds, and even potential industry groups willing to participate in the expansion project are on the radar. An IPO is also not out of the question.Valor has learned from industry sources that the Swiss bank UBS will open a data room next week so that interested parties can see AVB’s figures.The company, which has been under construction for a long time and started producing long-rolled steel (rebar and wire rod) in 2018, plans to increase its crude steel production capacity to 1.2 million tonnes from 730,000 tonnes. In the current scenario of the steel industry, in the country and globally, there is no willingness on the part of shareholders to take on debt and risks, a source said.This doubling of capacity would cost around R$2 billion to R$2.5 billion, mainly in two new production units — a steel mill and a new rolling mill — at the industrial complex in Açailândia, Maranhão state.After a difficult path to the creation of AVB, in which the debt increased and endangered the future of the company, the shareholders estimate that the project can be done with investors who see value in AVB’s model. It is considered a producer of "green steel" because it has a certified carbon-dioxide (CO2) neutral operation.At the end of 2022, according to the latest data from the international auditing company SGS, AVB maintained unchanged the seal of the emission-neutral long carbon steel plant recognized by the World Steel Association (WSA). The result for the year was again 0.02 tonnes of CO2 emitted per tonne of steel produced.Observing the global race for decarbonization in the steel industry, the largest emitter of CO2 in the industrial sector (it accounts for 7%), the mini mill of long steels located in Açailândia has already experienced this process. The company takes advantage of the gases generated in the process (in a closed circuit) in the production lines and has invested in thermal plants to generate energy from these gases. In addition, the goal is to generate zero waste in the plant.The steelmaker — which is 100% controlled by the Nascimento family, from Minas Gerais, owner of the Ferroeste group and which has had...
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