Hugo Chavez threatens Sidor expropriation

Venezuela's President Hugo Chavez speaks during his weekly broadcast 'Alo Presidente' in Chuao, Aragua state, April 27, 2008. Chavez threatened to expropriate steelmaker Ternium Sidor if the company's ownership cannot reach an agreement over its nationalization. (REUTERS/Miraflores Palace/Handout)

CARACAS (Reuters) - Venezuelan President Hugo Chavez on Sunday threatened to expropriate steelmaker Ternium <TX.N> Sidor if the company cannot reach an agreement over its nationalization "in the coming hours."

The announcement comes only a day after Venezuela said it would offer Ternium less than $800 million for its 60 percent stake in the company, less than a quarter of the $4 billion Chavez said the company wants for its holdings.

The aggressive stance could complicate Chavez's effort to take over the nation's largest steelmaker without creating a conflict with the allied government of Argentina, home of the Ternium steel conglomerate that controls Sidor.

"I will not pay $4 billion for that company," Chavez said, during his weekly Sunday broadcast.

"If they do not want to reach an agreement with us, on Tuesday I will sign an expropriation decree and take immediate control of the company."

Venezuela said on Sunday its preliminary valuation of Ternium's holdings was $800 million, though it would subtract from this amount any pending debts -- which could include a $200 million debt to state energy company PDVSA.

"I do not want to harm them ... but I just had to laugh when I read they wanted $4 billion. I said that cannot be, they must be crazy," Chavez said.

He ordered the nation's vice-president, who has overseen much of the Sidor talks, to meet with the company on Monday to seek an agreement.

Chavez last year nationalized the holdings of U.S. telecommunications giant Verizon Communications Inc <VZ.N> and power generator AES Corp <AES.N>, making financial compensation to the companies that analysts said were fair.

The company last year agreed to pay the state higher prices for raw materials and supply more steel to the domestic market in a bid to avoid nationalization.

The leftist leader announced the Sidor takeover this month after repeated union strikes over a collective bargaining dispute and after months of complaining Sidor was not supplying enough to the local market.

Sidor workers and the government each own 20 percent of Sidor, which in 2007 produced 4.3 million tonnes of liquid steel.

(Reporting Ana Isabel Martinez, writing by Brian Ellsworth, editing by Richard Chang)

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