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Note 13 - Investments in Non-consolidated Companies | 12 Months Ended
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Dec. 31, 2020
Disclosure of unconsolidated structured entities [abstract] |
Note 13 - Investments in Non-consolidated Companies | 13 Investments in non-consolidated companies
|  | Year ended December 31, |
(all amounts in thousands of U.S. dollars) |  | 2020 |  |  | 2019 |
At the beginning of the year |  |  | 879,965 |  |  |  | 805,568 |
Translation differences |  |  | (31,977 | ) |  |  | (10,781 | )
Equity in earnings of non-consolidated companies |  |  | 108,799 |  |  |  | 82,036 |
Increase due to business combinations |  |  | - |  |  |  | 20,635 |
Dividends and distributions declared (*) |  |  | (861 | ) |  |  | (28,037 | )
Additions |  |  | - |  |  |  | 19,610 |
Increase / (decrease) in equity reserves and others |  |  | 1,426 |  |  |  | (9,066 | )
At the end of the year |  |  | 957,352 |  |  |  | 879,965 |
(*) Related to Ternium and Usiminas. During 2020 and 2019 $0.3 million and $29.0 million respectively were collected. The principal non-consolidated companies are:
|  |  |  | % ownership at December 31, |  | Value at December 31, |
Company |  | Country of incorporation |  | 2020 |  | 2019 |  | 2020 |  |  |  | 2019 |
a) Ternium (*) |  | Luxembourg |  | 11.46% |  | 11.46% |  | 830,028 |  |  |  | 751,105 |
b) Usiminas (**) |  | Brazil |  | 3.07% |  | 3.07% |  | 65,144 |  |  |  | 74,593 |
c) Techgen |  | Mexico |  | 22.00% |  | 22.00% |  | 19,536 |  |  |  | 9,888 |
d) Global Pipe Company |  | Saudi Arabia |  | 35.00% |  | 35.00% |  | 23,421 |  |  |  | 22,550 |
Others |  | - |  | - |  | - |  | 19,223 |  |  |  | 21,829 |
|  |  |  |  |  |  |  | 957,352 |  |  |  | 879,965 |
(*) Including treasury shares. (**) At December 31, 20 20 and 201 9 the voting rights were 5.19%. a) Ternium Ternium, is a steel producer with production facilities in Mexico, Argentina, Brazil, Colombia, Un ited 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, 20 20, the closing price of Ternium’s ADSs as quoted on the New York Stock Exchange was $29.08 per ADS, giving Tenaris’s ownership stake a ma rket value of approximately $668 million. A t December 31, 20 20, the carrying value of Tenaris’s ownership stake in Ternium, based on Ternium’s IFRS Financial S ta tements, was approximately $830 million. As of December 31, 2020, 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:
(all amounts in thousands of U.S. dollars) |  |  | Ternium |
|  |  | 2020 |  |  |  | 2019 |
Non-current assets |  |  | 8,289,460 |  |  |  | 8,757,320 |
Current assets |  |  | 4,566,775 |  |  |  | 4,178,213 |
Total assets |  |  | 12,856,235 |  |  |  | 12,935,533 |
Non-current liabilities |  |  | 2,559,485 |  |  |  | 3,452,535 |
Current liabilities |  |  | 1,853,597 |  |  |  | 1,768,125 |
Total liabilities |  |  | 4,413,082 |  |  |  | 5,220,660 |
Equity |  |  | 8,443,153 |  |  |  | 7,714,873 |
Revenues |  |  | 8,735,435 |  |  |  | 10,192,818 |
Gross profit |  |  | 1,635,512 |  |  |  | 1,740,378 |
Net income for the year attributable to owners of the parent |  |  | 778,468 |  |  |  | 564,269 |
Total comprehensive income for the year, net of tax, attributable to owners of the parent |  |  | 666,667 |  |  |  | 445,473 |
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, 20 20, the closing price of the Usiminas’ ordinary and preferred shares, as quoted on the B3 - Brasil Bolsa Balcão S.A, was BRL 15.69 ($3.02) and BRL 14.61 ($2.81), respectively, giving Tenaris’s ownership stake a market value of approximately $113.8 million. As of that date, the carrying value of Tenaris’s ownership stake in Usiminas was approximately $65.1 million. Summarized selected financial information of Usiminas, including the aggregated amounts of assets, liabilities, revenues and profit or loss is as follows:
(all amounts in thousands of U.S. dollars) |  |  | Usiminas |
|  |  | 2020 |  |  |  | 2019 |
Non-current assets |  |  | 3,487,317 |  |  |  | 4,335,662 |
Current assets |  |  | 2,276,368 |  |  |  | 2,198,449 |
Total assets |  |  | 5,763,685 |  |  |  | 6,534,111 |
Non-current liabilities |  |  | 1,661,605 |  |  |  | 1,955,395 |
Current liabilities |  |  | 861,912 |  |  |  | 716,930 |
Total liabilities |  |  | 2,523,517 |  |  |  | 2,672,325 |
Equity |  |  | 3,240,168 |  |  |  | 3,861,786 |
Revenues |  |  | 3,132,949 |  |  |  | 3,790,206 |
Gross profit |  |  | 624,199 |  |  |  | 478,141 |
Net income for the year attributable to owners of the parent |  |  | 106,361 |  |  |  | 52,779 |
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, and started producing energy on December 1, 2016, with a power capacity of 900 megawatts. As of December 31, 2020, Tenaris held 22% of Techgen’s share capital, and its affiliates, Ternium and Tecpetrol (both controlled by San Faustin), held 48% and 30% respectively. As of December 31, 2020, the carrying value of Tenaris’s ownership stake in Techgen was approximately $19.5 million. Techgen entered into certain tra nsportation capacity agreements, a contract for the purchase of power generation equipment and other services related to the equipment, and an agreement for the purchase of clean energy certificates. As of December 31, 20 20, Tenaris’s exposure under these agreements amounted to $48.8 million, $0.9 million and $17.6 million respectively. During 2019, Techgen repaid certain subordinated loans to Techgen’s sponsors; the p ortion corresponding to Tenaris amounted to $40.5 million. As of December 31, 20 20, the aggregate outstanding principal amount under these subordinated loans was $58.1 million. Techgen is a party to a $640 million syndicated loan agreement, which is “non-recourse” on the sponsors. Techgen’s obligations thereunder are guaranteed by a Mexican security trust (covering shares, assets, accounts and contract rights), account pledges and certain direct agreements –customary for these type of transactions–. The commercial terms and conditions governing the purc hase of 22% of the energy generated by Techgen, by the Company’s Mexican subsidiary, Tamsa, remain substantially 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. d) GPC GPC is a Saudi-German joint venture, established in 2010 and located in Jubail, Saudi Arabia, which manufactures LSAW pipes. Tenaris, through its subsidiary SSPC, currently owns 35% of the share capital of GPC. As of December 31, 2020, the carrying value of Tenaris’s ownership stake in GPC was approximately $23.4 million. SSPC and the other three owners of GPC have issued corporate guarantees to secure repayment of loan agreements entered into by GPC, with the Saudi Investment Development Fund, the Saudi British Bank, the National Commercial Bank and Banque Saudi Fransi to finance GPC’s capital expenditures and working capital. As of December 31, 2020, SSPC’s exposure under the guarantees amounted to $131.5 million.

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