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Note 12 - Investments in Non-consolidated Companies | 12 Months Ended
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Dec. 31, 2019
Statement Line Items [Line Items] |
Disclosure of interests in other entities [text block] |
| 12 | Investments in non-consolidated companies
|  | Year ended December 31,
|  | 2019 |  | 2018
At the beginning of the year |  |  | 805,568 |  |  |  | 640,294 |
Translation differences |  |  | (10,781 | ) |  |  | 1,848 |
Equity in earnings of non-consolidated companies |  |  | 82,036 |  |  |  | 193,994 |
Increase due to business combinations |  |  | 20,635 |  |  |  | - |
Dividends and distributions received (*) |  |  | (28,037 | ) |  |  | (26,581 | )
Additions |  |  | 19,610 |  |  |  | - |
Decrease / increase in equity reserves and others |  |  | (9,066 | ) |  |  | (3,987 | )
At the end of the year |  |  | 879,965 |  |  |  | 805,568 |
(*) Related to Ternium and Usiminas. During 2019, $29.0 million were collected. The principal non-consolidated companies are:
|  |  |  | % ownership at December 31, |  | Value at December 31,
Company |  | Country of incorporation |  | 2019 |  | 2018 |  | 2019 |  | 2018
a) Ternium (*) |  |  | Luxembourg |  |  |  | 11.46 | % |  |  | 11.46 | % |  |  | 751,105 |  |  |  | 725,548 |
b) Usiminas (**) |  |  | Brazil |  |  |  | 3.07 | % |  |  | 3.07 | % |  |  | 74,593 |  |  |  | 72,988 |
Others |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 54,267 |  |  |  | 7,032 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 879,965 |  |  |  | 805,568 |
(*) Including treasury shares. (**) At December 31, 2019 and 2018 the voting rights were 5.2%. a) Ternium Ternium, is a steel producer with production facilities in Mexico, Argentina, Brazil, Colombia, United States and Guatemala and is one of Tenaris’s main suppliers of round steel bars and flat steel products for its pipes business. At December 31, 2019, the closing price of Ternium’s ADSs as quoted on the New York Stock Exchange was $22 per ADS, giving Tenaris’s ownership stake a market value of approximately $505.4 million. At December 31, 2019, the carrying value of Tenaris’s ownership stake in Ternium, based on Ternium’s IFRS Financial Statements, was approximately $751.1 million. As of December 31, 2019 the Company concluded that the carrying amount does not exceed the recoverable value of the investment. Summarized selected financial information of Ternium, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:
|  | Ternium
|  | 2019 |  | 2018
Non-current assets |  |  | 8,757,320 |  |  |  | 8,121,824 |
Current assets |  |  | 4,178,213 |  |  |  | 4,426,038 |
Total assets |  |  | 12,935,533 |  |  |  | 12,547,862 |
Non-current liabilities |  |  | 3,452,535 |  |  |  | 3,236,756 |
Current liabilities |  |  | 1,768,125 |  |  |  | 1,826,530 |
Total liabilities |  |  | 5,220,660 |  |  |  | 5,063,286 |
Non-controlling interests |  |  | 1,103,208 |  |  |  | 1,091,321 |
Revenues |  |  | 10,192,818 |  |  |  | 11,454,807 |
Gross profit |  |  | 1,740,378 |  |  |  | 2,971,479 |
Net income for the year attributable to owners of the parent |  |  | 564,269 |  |  |  | 1,506,647 |
Total comprehensive income for the year, net of tax, attributable to owners of the parent |  |  | 445,473 |  |  |  | 1,176,964 |
b) Usiminas Usiminas is a Brazilian producer of high quality flat steel products used in the energy, automotive and other industries. As of December 31, 2019, the closing price of the Usiminas’ ordinary and preferred shares, as quoted on the B3 - Brasil Bolsa Balcão S.A, was BRL9.83 ( $2.44 ) and BRL9.51 ( $2.36 ), respectively, giving Tenaris’s ownership stake a market value of approximately $92 million. As of that date, the carrying value of Tenaris’s ownership stake in Usiminas was approximately $74.6 million. Summarized selected financial information of Usiminas, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:
|  | Usiminas
|  | 2019 |  | 2018
Non-current assets |  |  | 4,335,662 |  |  |  | 4,696,896 |
Current assets |  |  | 2,198,449 |  |  |  | 2,148,322 |
Total assets |  |  | 6,534,111 |  |  |  | 6,845,218 |
Non-current liabilities |  |  | 1,955,395 |  |  |  | 1,933,207 |
Current liabilities |  |  | 716,930 |  |  |  | 860,862 |
Total liabilities |  |  | 2,672,325 |  |  |  | 2,794,069 |
Non-controlling interests |  |  | 377,667 |  |  |  | 369,333 |
Revenues |  |  | 3,790,206 |  |  |  | 3,766,241 |
Gross profit |  |  | 478,141 |  |  |  | 612,156 |
Net income for the year attributable to owners of the parent |  |  | 52,779 |  |  |  | 194,381 |
c) Techgen Techgen is a Mexican company that operates a natural gas-fired combined cycle electric power plant in the Pesquería area of the State of Nuevo León, Mexico. The company started producing energy on December 1, 2016, with a power capacity of 900 megawatts. As of December 31, 2019, Tenaris held 22% of Techgen’s share capital, and its affiliates, Ternium and Tecpetrol International S.A. (a wholly-owned subsidiary of San Faustin S.A., the controlling shareholder of both Tenaris and Ternium), held 48% and 30% respectively. Techgen is a party to transportation capacity agreements for a purchasing capacity of 150,000 MMBtu/Gas per day starting on August 1, 2016 and ending on July 31, 2036, and a party to a contract for the purchase of power generation equipment and other services related to the equipment. As of December 31, 2019, Tenaris’s exposure under these agreements amounted to $51.9 million and $0.9 million respectively. Furthermore, during 2018, Techgen entered a contract for the purchase of clean energy certificates. As of December 31, 2019 Tenaris’s exposure under this agreement amounted to $18.2 million. During 2019, Techgen repaid certain subordinated loans to Techgen’s sponsors; the part corresponding to Tenaris amounted to $40.5 million. As of December 31, 2019, the aggregate outstanding principal amount under these subordinated loans was $58.1 million. On February 13, 2019, Techgen entered into a $640 million syndicated loan agreement with several banks to refinance an existing loan, resulting in the release of certain corporate guarantee issued by Techgen’s shareholders to secure the replaced facility. Techgen’s obligations under the current facility, which is “non-recourse” on the sponsors, are guaranteed by a Mexican security trust covering Techgen’s shares, assets and accounts as well as Techgen’s affiliates rights under certain contracts. In addition, Techgen’s collection and payment accounts not subject to the trust have been pledged in favor of the lenders under the new loan agreement, and certain direct agreements –customary for these type of transactions– have been entered into with third parties and affiliates, including in connection with the agreements for the sale of energy produced by the project and the agreements for the provision of gas and long-term maintenance services to Techgen. The commercial terms and conditions governing the purchase, by the Company’s Mexican subsidiary Tamsa, of 22% of the energy generated by the project remain unchanged. Under the loan agreement, Techgen is committed to maintain a debt service reserve account covering debt service becoming due during two consecutive quarters; such account is funded by stand-by letters of credit issued for the account of Techgen’s sponsors in proportion to their respective participations in Techgen. Accordingly, the Company and its Swiss subsidiary, Tenaris Investments Switzerland AG, applied for stand-by letters of credit covering 22% of the debt service coverage ratio, which as of the date hereof amounts to $9.8 million.

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