The Management Team of Usiminas

Mar. 24, 2017

Nippon Steel & Sumitomo Metal Corporation

Usinas Siderúrgicas de Minas Gerais S.A. – USIMINAS (“USIMINAS”), an equity method affiliated company in Brazil of Nippon Steel & Sumitomo Metal Corporation (“NSSMC”), held an extraordinary Board of Directors meeting on March 23, 2017 (Brazilian local time), and approved the removal of Mr. Rômel Erwin de Souza from the position of the CEO and the appointment of Mr. Sergio Leite de Andrade as the new CEO (collectively, the “March 23 Resolution”).

At said Board of Directors meeting, without prior consent of NSSMC, the removal of Mr. Rômel from the position of the CEO was approved without any legitimate reason and the appointment of Mr. Sergio as the new CEO was also approved.  NSSMC believes that this is a clear violation of the Shareholders’ Agreement of USIMINAS which requires the prior consensus between NSSMC and TERNIUM group for the nomination and removal of the CEO.

At the Board of Directors meeting held in May 2016, the appointment of the members of the Board of Officers including Mr. Sergio as the CEO was approved without consent of NSSMC.  However, in October 2016, the court found this decision to be illegal and Mr. Rômel returned to the position of the CEO.  It is very regrettable that similar actions were taken again for the purpose of removing Mr. Rômel and causing Mr. Sergio to assume the position of the CEO.

In the severe business environment arising from the downturn of the Brazilian economy, USIMINAS, led by the strong leadership of Mr. Rômel, completed the capital reinforcement through the capital increase in the amount of 1 billion reais and debt restructuring with major banks last year and since then, has been actively taking measures to improve its profitability and financial strength.  USIMINAS is steadily moving toward its turnaround as shown in the financial result of 2016 disclosed recently.  NSSMC believes that the March 23 Resolution is against the best interest of USIMINAS and its stakeholders.

NSSMC believes that the March 23 Resolution was made in clear violation of the Shareholders’ Agreement and without any legitimate reason and, therefore, is invalid.  NSSMC will take all necessary legal measures, among others, to annul the March 23 Resolution.

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