Vale Sells $1.2 Billion Cargo Stakes to Mitsui and Brazil Fund

Vale SA (VALE), the world’s third-largest mining company, is selling stakes in its cargo unit for about $1.2 billion to Japan’s Mitsui & Co. and a Brazilian government fund as it seeks to focus on higher-return assets.

The iron-ore producer based in Rio de Janeiro agreed to sell a 20 percent stake in the VLI unit to Mitsui for 1.51 billion reais ($675 million) and 15.9 percent to the FI-FGTS fund managed by state-owned bank Caixa Economica Federal for 1.2 billion reais, according to a regulatory filing today. Vale said it’s also in exclusive talks with Canada’s Brookfield Asset Management Inc. (BAM/A) to sell about 26 percent of VLI. Its stake would drop to less than 40 percent after all the deals, Vale said.

Vale is selling assets, suspending projects and focusing on its more profitable iron-ore business in a bid to recover profit margins amid lower commodities prices. The VLI unit, which controls ports, terminals and more than 10,000 kilometers (6,215 miles) of railroads in Brazil, plans to invest 9 billion reais through 2017 to expand capacity in Latin America’s largest economy.

“Vale will have a minority stake when the three new shareholders have concluded everything and we are even thinking in the future of holding a public offering” of shares in the unit, Vale Chief Executive Officer Murilo Ferreira told reporters today in Brasilia. “We believe in the next few years we will all perceive a big change in the Brazilian logistics system.”

Vale fell 0.4 percent to 32.86 reais at 2 p.m. in Sao Paulo, heading to the lowest close since Sept. 6.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: Carlos Caminada at ccaminada1@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.