CSN Negotiates New Asset Sales as Net Debt Reaches 44.92 Billion Reais

Key Facts

Newly appointed Companhia Siderúrgica Nacional CEO Fabio Schvartsman said on November 13 that the company was actively negotiating to sell additional assets in the near term, as consolidated net debt reached 44.92 billion Brazilian reais at the end of September. Third-quarter results showed net debt to EBITDA for the trailing 12 months rising to 4.23 times, up 74 basis points from the previous quarter. Schvartsman said the company was not disclosing the assets under negotiation, explaining that each asset had different considerations. He added that CSN preferred to sell infrastructure and logistics assets individually, rather than sell a combined minority stake in the business. "We will sell the assets individually, and of course not all of them; each case has its own particularities."

The increase in leverage reflects a decline in the operating earnings base against which it is measured. Adjusted EBITDA was 1,875.9 million reais in the third quarter, down 32.3% from the previous quarter and 43.5% from the same period in 2025, according to CSN's filing with the U.S. Securities and Exchange Commission. The company said the decline in operating results over the trailing 12 months was linked to shrinking mining margins amid lower iron ore prices and higher ocean freight costs. In the filing, it said that "lower iron ore prices and higher ocean freight costs" weighed on performance. As operating earnings contracted, the debt-to-EBITDA ratio rose to 4.23 times in 3Q26 compared with the second quarter, not the previous year. The quarterly increase in the ratio was 74 basis points, according to company data.

Weak earnings coincided with negative free cash flow of 3.5 billion reais in the third quarter, following a positive result in the previous quarter. CSN attributed the reversal to weak operating performance, debt repayments and iron ore prepayment contracts. This adds to liquidity pressure as the company seeks to negotiate new asset deals and manage its maturities. The company had previously announced an agreement to sell its cement unit to Huaxin for 12.7 billion reais, while it sold its German SWT unit to Spain's Bipadosa for 3 billion reais; however, the report published on November 13 did not say that both deals had been completed by that date. The cement deal is expected to close in the first quarter of 2027, while CSN is working to bring forward collection of the payment to 2026, according to Bloomberg.

After the asset deals, Schvartsman said the near-term priority would be to negotiate with local banks to extend debt maturities. He also pledged to negotiate lower interest rates and longer maturities, according to Bloomberg. The CEO did not confirm that leverage could reach 3 times by the end of 2026, saying that "at this time, it is not possible to guarantee that the company will meet the forecast of reaching leverage of 3 times by the end of this year." The caution comes as the sale of additional assets remains central to the company's plan to address its debt, without disclosing which assets have actually entered sale negotiations. Schvartsman also favored handling logistics and infrastructure assets individually, noting that the company would not sell all of them.

CSN shares fell more than 10% during the Friday, November 13 session, according to Folha, while a Reuters report said the decline was close to 10% at 13:00. EL7 data showed SID closing at $0.6288 that day, compared with $0.7723 in the November 12 session. The session's losses followed stronger share performance in the third quarter; the company said its shares rose 24.9% during that period, versus an 8.3% gain in the Ibovespa. The decline puts the stock's latest session in the context of third-quarter results and debt and cash-flow pressures, following quarterly gains that outpaced the Brazilian index. Management's next steps include continuing asset-sale negotiations and talks with banks over debt maturities and costs.