Batista’s CCX Tumbles on Fire Sale of Colombia Mines to YildirimJuan Pablo Spinetto
CCX Carvao da Colombia SA, the coal unit of former billionaire Eike Batista, plunged the most since mid-June after slashing the value of its Colombian coal assets by 72 percent in a sale to Turkey’s Yildirim Holding AS.
CCX will sell its San Juan underground mine and logistics project and two additional open-pit deposits to Yildirim for $125 million, the company said in a regulatory filing today. That compares with a $450 million sale price announced in a preliminary agreement Oct. 29. CCX tumbled 23 percent.
The initial deal required due diligence and included payments based on reaching some operational targets, CCX said in today’s statement, explaining the difference between both prices. The agreement is expected to close during the second quarter, the company said.
Batista, once the world’s eighth richest person, in the past six months has sold stakes in energy, logistics and entertainment ventures after mounting debt and missed target prompted investors to drop his companies’ shares and bonds. Batista said in 2011 that CCX, the last of the six units listed by the Brazilian tycoon between 2006 and 2012, may be worth as much as $6 billion.
While the flagship San Juan underground mine includes 671.8 million metric tons of reserves and railway and port infrastructure, the Canaverales and Papayal open-pit mines hold 27.3 million tons and 15.6 million tons of coal, respectively, CCX said in the October statement.
EBX Group Co., the holding company for most of entrepreneur’s assets, declined to comment on the asset sale. CCX referred to the statement, declining to comment further. Shares of the company fell 23 percent to close at 86 centavos in Sao Paulo, the biggest decline since June 20.
Batista, 57, formed 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 San Juan would require $5.5 billion, including costs to start production in 2017 and achieve full capacity five years after that.
Morgan Stanley advised the Batista unit on the sale, CCX said in today’s statement.
Separately, Batista also sold his Gloria hotel in Rio to Acron AG, the Swiss real estate investment firm said today in a statement.