By Guillermo Parra-Bernal
SAO PAULO, Oct 15 (Reuters) - Brazilian businessman EikeBatista ceded control of an iron ore port to Dutch energy firmTrafigura Beheer BV and an Abu Dhabi sovereign wealth fund in a$996 million deal that takes debt off his hands and secures newinvestment for the port.
The former billionaire's latest effort to stave off thecollapse of his once high-flying Grupo EBX conglomerate followsthe sale of other key assets and comes amid talks with creditorsof OGX Petróleo e Gas Participações SA. The oilproducer missed a $44.5 million bond interest payment this monthand, analysts say, risks going bankrupt within weeks.
Under the terms of the deal, Trafigura andinvestment fund Mubadala Development Co, Batista'slargest single creditor, will get a 65 percent stake in MMXPorto Sudeste Ltda, a port under construction that is slated tostart operating by mid-2014.
Mubadala, which also owns a stake in EBX, and Trafigura hadentered exclusive talks for the asset with Batista and thegroup's mining unit MMX Mineração e Metálicos SA lastmonth. MMX will keep the remaining 35 percent stake in PortoSudeste.
Trafigura and Mubadala plan to pump $400 million into thecompany to finance the completion of the port and iron oreterminal and will assume 1.3 billion reais ($596 million) ofdebt taken on by MMX Sudeste Mineração SA, a MMX unit linked tothe port project, a securities filing said.
Batista's EBX group was worth as much as $60 billion at thestart of last year but the value of its companies collapsedafter missed production and profit targets, mounting debt and aweaker outlook for Brazil and other commodities producers.
In July, Batista ceded control of power company MPX EnergiaSA to German utility E.ON SE. MPX has since beenrenamed Eneva SA. In August, he agreed to sell LLX Logística SA to U.S.-based investment firm EIG Global EnergyPartners LLC for $559 million.
The port, which is located in the southeastern state of Riode Janeiro, will initially have the capacity to ship up to 50million metric tonnes of iron ore annually.
The completion of the Porto Sudeste deal is subject toregulatory approval and the conclusion of a debt refinancingplan. The filing did not provide details on the scope of suchplan.
Trafigura and Mubadala will also pay holders of special MMXunit shares a royalty for iron ore shipped after theport makes a profit. The unit shares, which do not conveyownership in the company, were given to holders of Batista's LLXwhen it sold the port project to MMX in 2010.
Both companies will also provide MMX Sudeste Mineração with$100 million in a trade finance facility. "The availability offinancial resources, in line with this financing program, is apre-condition to the approval of the transaction as a whole,"the filing added.
MMX said it will host a conference call with investors assoon as possible but declined to give a exact day for the event.
- Investment & Company Information
- Eike Batista
- Trafigura Beheer BV