Mubadala Development Co., the Abu Dhabi government-owned investor, will get stakes in Eike Batista’s mining company and a port in Rio de Janeiro as part of a deal to restructure a $2 billion investment with the former Brazilian billionaire.
Batista will transfer 185.6 million shares of Prumo Logistica SA (PRML3), or a 10.44 percent stake valued at 193.1 million reais ($84.9 million) as of yesterday’s closing, to Mubadala in the third quarter, the port developer said today. He will also transfer 17.1 million shares of MMX Mineracao & Metalicos SA, or a 10.52 percent stake worth 24.4 million reais, the Rio de Janeiro-based iron-ore producer said yesterday. The deals are subject to undisclosed conditions, both companies said, without elaborating.
Mubadala invested $2 billion with Batista’s EBX Group Co. in 2012, when it valued the former boat-racing champion’s empire of logistics and commodities companies at more than $35 billion. The deal soured later that year when missed targets, mounting debt and accumulating losses forced Batista to cancel projects and sell assets amid a share price slump.
In February, Mubadala and commodities trader Trafigura Beheer BV completed the purchase of a controlling stake in Batista’s Sudeste port in Rio state for $400 million, gaining a foothold to export iron ore.
“With the impending closing of the transfer of MMX Mineracao & Metalicos SA (MMXM3) shares, the completion of the Porto Sudeste transaction, and the other interests we received from the earlier restructuring, we have redeemed a substantial part of our original investment,” Mubadala said in a statement today. “We also believe that a number of EBX assets continue to have significant potential value for Mubadala and other investors.”
Batista founded Prumo, which is developing the Acu port in Rio state, in 2007. In October, he surrendered control of Prumo to private equity EIG Global Energy Partners LLC as the investor confidence crisis deepened, forcing the former tycoon to divest assets to pay back debt. Mubadala will be Prumo’s third-largest shareholder after the shares are transferred, according to data compiled by Bloomberg.
Prumo said in an e-mailed reply to questions that Mubadala won’t have a seat on the board as a consequence of the share transfer, which doesn’t modify the control of the company by EIG.
Batista will remain as controller of MMX once the shares are transfered and Mubadala will become the second-largest shareholder in the mining company, MMX said in an e-mailed reply to questions.
Batista’s EBX declined to comment in an e-mailed statement.
MMX dropped 2.1 percent to 1.40 reais in Sao Paulo, giving it a market value of 227.1 million reais. The stock, which at its 2008 peak had a 18.3 billion reais market capitalization, has slumped 85 percent in the past 12 months.
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