Holcim said on Monday it wants full compensation for the assets seized by Venezuela’s government in 2008 during a nationalisation drive.
Venezuelan President Hugo Chavez took over Holcim Venezuela and other foreign cement companies as part of his bid in 2008 to run key industries in the South American oil-producing nation. The nationalisation of Holcim Venezuela became effective in June. Holcim and the Venezuelan government signed a memorandum of understanding last August that would grant Holcim some compensation.
But Holcim says the Venezuelan government has stopped all communication with the cement maker in October, prompting Holcim’s new action.
"Holcim intends to seek relief in the form of compensation equivalent to the full fair market value of all assets at the time of the nationalization, an amount substantially greater than the value placed on Holcim Venezuela for purpose of the transaction contemplated by the Memorandum of Understanding," the cement maker said.
Since Chavez won a referendum in February that allows him to stay in office as long as he keeps winning elections, he has extended nationalisations of foreign assets he says are the centerpiece of his socialist revolution.
Chavez announced the takeover of the cement sector last April, targeting Lafarge, Cemex and Holcim. Lafarge and Holcim agreed to stay on as minority partners.
The government said it paid US$552m for an 85 per cent stake in Holcim and US$267m for 89 per cent of the shares in Lafarge’s Venezuelan operations.