BTG Buys MPX Stake Even as Batista Advisory Pact Is Scaled Back

Grupo BTG Pactual (BBTG11), the investment bank controlled by billionaire Andre Esteves, exercised an option to acquire 28.2 million shares in MPX Energia SA (MPXE3), the power generator founded by Eike Batista.

BTG will buy the shares through BTG Pactual SA for 181.6 million reais ($78.7 million), MPX said in a Sept. 6 regulatory filing after the markets closed. BTG paid 6.45 reais, or a 7.14 percent premium on the Sept. 6 closing price, under the terms of the capital injection agreement, which had been announced July 4.

The agreement replaced plans by MPX to raise 1.2 billion reais through a share offering. The plan was canceled July 4 after BTG said it wasn’t viable due to market conditions. Under the new agreement, EON SE, Germany’s biggest utility, boosted its stake in MPX to 36 percent through a private placement, while Batista’s holding dropped to 29 percent, according to the company website. Batista then stepped down as chairman of MPX, though he and EON continue to jointly control MPX under a partnership accord.

More than $30 billion of Batista’s net worth disappeared since early 2012 as investors lost confidence in his interlinked natural resources and logistics empire in the face of missed production targets, growing debt and project delays. The reduction of his MPX stake was part of the former billionaire’s attempt to raise cash amid a corporate restructuring.

Batista and Sao Paulo-based BTG announced March 6 an agreement under which the bank would offer Batista’s companies financial advisory, credit and future long-term investments in projects. BTG has since canceled the credit-line and scaled back the agreement, though it will continue to advise Batista on sales, a person familiar with the matter said last month. Batista in August hired Angra Partners to advise on the corporate restructuring.

MPX accounts for about 80 percent of the debt, which totals about 650 million reais, that Batista companies have with the bank, a person familiar said in July.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.