MMX Slumps to Three-Week Low as Brazil Tax Charge Exceeds SalesLucia Kassai
MMX Mineracao & Metalicos SA, the mining company controlled by billionaire Eike Batista, fell to a three-week low after being ordered to pay back taxes that represent more than four times its estimated sales.
MMX slid 3.6 percent to 4.29 reais, the lowest closing price since Dec. 18.
“The case is groundless,” Chief Executive Officer Guilherme Escalhao said in a telephone interview from Rio de Janeiro today. “We have legal reports that support our view.”
MMX, which was ordered to pay 3.76 billion reais ($1.86 billion) in back taxes, probably will appeal this month and considers the risk of it having to pay the amount as “remote,” he said.
Brazil’s Internal Revenue Service said taxes are due after Anglo American Plc boosted its stake in the Minas-Rio mining business, Rio de Janeiro-based MMX said in a regulatory filing today. The agency also ordered back taxes on gains related to share sales by Batista’s Centennial Asset Mining Fund, according to the filing.
MMX said it won’t make provisions for the payment. The total claim is more than four times estimated 2012 sales of 839 million reais, the median of 11 forecasts compiled by Bloomberg.