POSCO Planning to Sell Its USP Shares to Russian Steelmaker

POSCO is having talks with Evraz, a Russian steelmaker, to sell its United Spiral Pipe (USP) shares. The sale price is estimated at around US$150 million.

USP is an American steel pipe manufacturer that was set up in 2007 by POSCO, U.S. Steel, and SeAH Steel. SeAH Steel represents 30 percent of the shares, and POSCO and U.S. Steel own 35 percent each. Eight years ago the joint venture company’s outlook had been bright, with the oil refining industry of the United States in a boom. However, it recorded huge losses more recently due to the economic recession and plummeting raw material prices.

In the meantime, Evraz is aggressively expanding its business nowadays by acquiring Chinese and North American steelmakers. Still, the conclusion of the contract is not sure as of now because of the recent economic crisis in Russia, depreciation of the ruble and intertwined interests of the companies concerned.

POSCO has accelerated its business restructuring since last year, when it sold subsidiaries like POSCO Specialty Steel and POSFINE. This year, POSCO Engineering & Construction and POSCO Energy are scheduled to go public.