Batista’s Colombia Mines Sale Latest Deal as Empire ShrinksJuan Pablo Spinetto
Eike Batista, the former Brazilian billionaire fighting to keep his commodities group afloat, agreed to sell two coal mines in Colombia for about $75 million in the latest asset divestment.
CCX Carvao da Colombia SA, Batista’s coal unit, will sell its Canaverales and Papayal open-pit mines to Transwell Enterprises Inc., the company said in a Sept. 13 regulatory filing after the market closed. Both deposits, located in La Guajira province, have an estimated production capacity of 2.5 million metric tons a year. Transwell also agreed to use CCX’s port and railway infrastructure, the company said.
Batista, who was Brazil’s richest person until November, is selling assets and ceded control of some energy, mining and logistics ventures to raise cash amid an investor confidence crisis triggered by missed targets and ballooning debt. MMX Mineracao & Metalicos SA, the entrepreneur’s iron-ore unit, last week agreed to sell control of a port in Rio de Janeiro state to Trafigura Beheer BV and Mubadala Development Co.
Canaverales holds 27.3 million metric tons of coal reserves while Papayal’s reserves amount to 15.6 million tons, CCX said. The company is keeping full ownership of its flagship San Juan underground mine, which has 671.8 million tons in reserves, and the associated logistics project, it said.
CCX declined to comment in an e-mailed statement today.
Batista, 56, created Rio de Janeiro-based CCX in May 2012 through a spinoff from his power generation unit MPX Energia SA, targeting 35 million tons of thermal coal output by 2020 from its three mines. The company estimated in an August 2012 filing that developing its San Juan project would require $5.5 billion, including costs to start production in 2017 and achieve full capacity five years after that.
CCX, which Batista said in 2011 may be worth as much as $6 billion, has a market value of 280.7 million reais ($123.1 million). It was the last of the six units listed by the tycoon between 2006 and 2012.
Shares of the company gained 171 percent from a record low on July 3 through Sept. 13, on speculation CCX would sell assets. The stock slid 7.8 percent to 1.65 reais at the close in Sao Paulo today, the most since Aug. 22.
Batista, once worth $34.5 billion, last month agreed to relinquish control of his LLX Logistica SA logistics unit to private-equity firm EIG Global Energy Partners LLC, following an accord to share control of MPX with EON SE, Germany’s largest utility. His OGX Petroleo & Gas Participacoes SA oil business is likely to ask bondholders for more cash during debt-restructuring negotiations to avoid filing for bankruptcy protection, Chief Executive Officer Luiz Carneiro said Sept. 12.