Venezuela's Sidor Reaches $1.9 Bln Restructuring with Creditors

June 23 (<a href=quote.bloomberg.com>Bloomberg) -- Siderurgica del Orinoco, Venezuela's biggest steelmaker, reached an agreement with the government and bank creditors to reduce its $1.88 billion in debt by more than half, enabling it to turn around its money-losing operations.

Sidor said in a press statement the government will increase its share in the company to 40 percent from 30 percent as part of the accord. The company's overall debt will fall to about $791 million with the agreement, a company spokesman said.

The agreement also clears the way for $133.5 million in new investment in the steelmaker.

The company defaulted on its debt in December 2001 when it missed a $31.3 million interest payment, after its financial condition worsened because of declining global steel prices. The agreement caps about 18 months of talks.

Before the agreement, Sidor was 70 percent-owned by Argentina's Siderar, Mexico's Hylsamex, Tubos de Acero de Mexico SA, Brazil's Usinas Siderurgica de Minas Gerais and Venezuela's Siderurgica Venezolana Sivensa SA. The government owned the remainder.