Aug. 19 (Bloomberg) -- MMX Mineracao & Metalicos SA, Eike Batista’s mining company, is seeking to sell assets to avoid following the former billionaire’s oil and shipping units into bankruptcy protection, a person familiar with the strategy said.
The Brazilian iron-ore miner is trying to find buyers for its remaining assets, or to lease them out, to bolster cash positions after prices of the steelmaking ingredient slumped, the person said, asking not to be named because the process is private and may not lead to deals being signed.
While Rio de Janeiro-based MMX has no immediate plans to seek court protection from creditors, it remains an option, the person said. MMX shares fell today to the lowest since being listed in 2006 after Veja magazine columnist Lauro Jardim wrote yesterday that the company will seek bankruptcy protection by the end of August.
“There is no deliberation underway” on a bankruptcy protection filing, the company said in a regulatory filing today. MMX declined to comment on the possibility in an e-mailed response to Bloomberg News.
MMX had record losses last year after putting on hold the expansion of its Serra Azul project and writing down the value of its assets. In February, the company sold a controlling stake in a key iron-ore port project in Rio and last month agreed to lease its Corumba mine to Vetria Mineracao SA.
Shares of MMX dropped 10 percent to 1.06 reais at the close in Sao Paulo today, the most since Jan. 6. The stock, which traded at 3.1 times its three-month average volume, lost 93 percent of its value in the past 12 months.
Batista, once Brazil’s richest person, has been selling pieces of his ventures as missed targets, mounting debt and accumulating losses forced his oil and shipbuilding companies to file enter into Brazil’s so-called judicial recovery proceedings last year.
The entrepreneur earlier this month agreed to transfer two stakes in MMX and port developer Prumo Logistica SA to Mubadala Development Co. as part of a deal to restructure a $2 billion investment provided by the Abu Dhabi government-owned investor.
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