Brazil sold Usiminas in 1991, its first big privatization, to a Bozano-led group

In May 1991 Brazil's government priced the giant steelmaker Usiminas at $1.6bn, calling it the first state company to be sold under an ambitious and controversial $18bn privatization program. Bankers said the sale had to succeed for the program to survive.

Usiminas had been created in the 1950s with Japanese partners; about 86% of its stock was for sale, with Nippon Usiminas holding the rest. In October 1991 the control block was auctioned and won by a consortium coordinated by Bozano, Simonsen, with Japanese investors among the buyers.

The auction made Usiminas the first major state-owned company privatized through Brazil's National Privatization Program. The Bozano-led group's later exit from its Usiminas stake was reported to have helped the bank earn about US$500m across its privatization investments.

The October 1991 auction sold control of Usiminas to a consortium coordinated by Bozano, Simonsen — the test case for $18bn of planned state sales.

Usiminas was the first state company scheduled for sale.

About 86% of the stock was on offer.

Bozano, Simonsen coordinated the winning October 1991 group.

The sale tested Brazil's $18bn privatization credibility.

Sell the best asset first: a flagship company's privatization built the credibility the whole program needed, even in a weak economy.

Usiminas stayed listed in São Paulo and became the reference for Brazil's 1990s state sell-offs; the Bozano group later sold down its stake, and the auction opened the path for later sales such as Embraer.