Brazilian steel and mining giant Cia Siderurgica Nacional (CSN) is embarking on a radical corporate transformation, with its financial strategy for 2026 now centered on a sweeping divestment program. This decisive shift comes as the company contends with a recent credit rating downgrade and operational challenges, aiming to use substantial asset sales to alleviate its significant debt burden.
A Credit Rating Under Pressure
On January 19, S&P Global Ratings adjusted its assessment of CSN, moving the rating from ‘BB-‘ down to ‘B+’. The agency maintained a negative outlook on the firm, highlighting execution risks associated with its deleveraging plans. Analysts indicated that further downgrades are possible if the planned asset disposals face delays or if operational performance remains subdued. Without substantial incoming funds, the company’s leverage ratio could persist above 5.0x its adjusted EBITDA in 2026.
Operational Setback in Minas Gerais
Adding to the company’s headwinds was a recent regulatory action in the Congonhas region. Local authorities temporarily suspended CSN’s operating license and issued a fine on January 26. This decision followed flooding in a mining area, which was attributed to an overflow from a neighboring third-party mine. CSN stated that its own containment structures remained intact. Operations are currently halted pending a full damage assessment and enhancements to communication protocols with regulators.
Core Portfolio Refocus Through Major Sales
In response to these pressures, management unveiled a comprehensive strategic overhaul in mid-January. The cornerstone of this plan is a divestment initiative targeting proceeds between 16 and 18 billion Brazilian Real. Assets slated for sale include the company’s cement division and stakes in its infrastructure business, which manages port and railway assets.
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This portfolio streamlining is designed to sharpen CSN’s focus on its high-margin mining operations and core steelmaking activities. The long-term objective is to achieve a net debt to EBITDA ratio of approximately 1.0x.
Maintaining Production Ambitions Amid Challenges
Despite the temporary suspension at Congonhas, CSN is reaffirming its production guidance for the current fiscal year. The company forecasts iron ore volume of around 44 million tonnes for 2026. A key strategic pillar remains the P15 project, scheduled for completion by the end of 2027. This initiative aims to significantly boost the proportion of high-grade iron ore with 65% Fe content, thereby strengthening margins within the mining segment over the long term.
The coming months will be critical for CSN as it seeks to execute this ambitious financial and operational restructuring on a tight timeline.
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