Venezuelan official says shareholders will be paid fair price for expropriated steel maker

Published November 20, 2014

Venezuela's government will pay a fair price for an expropriated steel company taken over by the state, a government official said Wednesday.

Industries Minister Ricardo Menendez defended the government's actions after the steel maker's former owners complained that President Hugo Chavez's government hasn't paid for Siderurgica del Turbio SA, or Sidetur.

Chavez ordered the expropriation of the company's assets in 2010. It was Venezuela's largest privately owned steel producer.

"It's normal that in the process of nationalization, control is taken of the operations, we agree subsequently on the value of the companies and we begin to pay," Menendez said in remarks published by the website of the state newspaper Correo del Orinoco.

Sidetur is one in a list of businesses that Chavez's socialist government has expropriated in recent years, also including cement, retail and food industry businesses.

Sidetur's board said in a statement published in the Venezuelan newspaper El Nacional on Tuesday that the government hasn't paid any compensation. It called the takeover illegal and a violation of the constitution, saying the government had occupied six plants and other facilities where scrap metal is collected, and had ordered the transfer of all funds in Sidetur's account to state-run Complejo Siderurgico Nacional SA.

"The company will take actions provided for under the national and international legal system in defense of its rights," Sidetur's board of directors said.

Sidetur's parent company Siderurgica Venezolana, or Sivensa, didn't respond on Wednesday to a phone call and an email seeking comment.

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