liquidity of his valuable investment in the firm. It was important to him and the other equity investors to increase the marketability of Rosario’s common stock. However, tempering any momentum to choose the IPO was the cautious sentiment among senior management regarding the impact of any securities issuance on their administrative control of the firm.
Sr.Este realized that, as chairman of the board, he could easily rely on someone else to explore the various options that might be available to Rosario Acero S.A. As the key framer of the company’s success so far, however, he had an interest in seeing the board select the alternative that would best assure a continuation of that financial and employment success. With much information in front of him and all of his knowledge of Rosario Acero S.A. in his head, Pablo Este sat down to determine which long-term financing option he would support
EXHIBIT 1 Percentage of Company Sales by Product Line
Fed. Recent Gross
Profit Margins
1994 1995 1996 1997
Rolls 40% 46% 46% 68% 32%
Castings 29 27 29 20 18(rough)
2(finished)
Continuous caster rolls
Mill liners
Staves
Other products
Services
Total
*Columns may not add to 100 because of rounding.
1997 percentages based on booking as of February 1997.