MRS Logistica SA

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In September 1996, MRS Logistica won a 30-year concession to rehabilitate and operate the 1,674 km southeastern railway network. In 1995, the Brazilian government decided to divide the national railway, RFFSA, into six exclusive regional systems and to offer a 30-year concession contract for each system. This is one of the six concessions that were awarded between March 1996 and July 1997. Concessions were awarded on the basis of the highest bid above the government's minimum price. Concessionaires paid an upfront lump sum, and a stream of pre-determined payments over the life of the concession. Unlike in Argentina, concessionaires have no control over initial employment decisions. The winning consortium, MRS Logistica, comprised: Cia Siderurgica Nacional and Usinas, Brazil's largest two steel mills; Mineracoes Reunidas Brasileiras and Ferteco, two major Brazilian iron ore producers; and Cia Siderurgica da Guanabara. MRS Logistica paid R$888.9 million (approximately US$ 855 million) for the concession. It plans to invest R$100 million in 1997, and another R$100 in 1998. Financing for this investment was raised through eurobonds placed on the market in 1997. The operators were planning to expand the network's freight capacity by 50% by 2001. As of December 2003, MRS Logistica was controlled by Companhia Siderurgica Nacional (32.2%), Mineracao Brasileira Reunidas (31.6%), Companhia Vale do Rio Doce (10.3%), Usinas Siderurgicas de Minas Gerais (10.1%), and Ultrafertil SA (3.5%). As of March 2009, the shareholding structure was: MBR held 32.93% of the shares; CSN held 22.93%; Vale held 10.89%; Usiminas held 11.13%; Gerdau held 1.31%; and other investores held 20.79%. In 2008, the total investment in rolling stock and infrastructure added up to US$ 570.7 million (BRL 1044.4 million). A total of US$ 274.5 million (BRL 549 million) was invested in 2009 (US$ 89 million - BRL 178 million - in rolling stock; US$ 110.5 million - BRL 221 million - in infrastructure; US$ 56 million - BRL 112 million - in signalling, energy and telecomunication; and US$ 19 million - BRL 38 million - in other expenditures). In 2014, the state-owned BNDES approved two loans to the company finance acquisition of rolling stock and the modernizadion of the network: US$ 48.8 million (BRL 114.6 million) in February and US$ 46 million (BRL 108.2 million) in November. The company invested US$ 42 million in 1999 and US$ 60.2 million in 2000. In the following two years, 2001 and 2002, the company investments in its facilities amounted US$ 35.9 million (R$ 79.9 million) and US$ 20.4 million (R$ 72 million) respectively. In 2003, the company invested US$41.6 million (R$ 124.8 million).