São Paulo – The mining company MMX, owned by businessman Eike Batista, has announced this Tuesday (10th) the signing of a memorandum of understanding granting Abu Dhabi’s Mubadala and the Netherlands’ Trafigura exclusive rights to negotiate the acquisition of Superporto Sudeste (Southeast Superport). If the deal goes through, the two companies will issue and purchase US$ 400 million worth of stock from MMX Porto Sudeste and take on outstanding debts to gain a 65% stake on the former company. The deal provides that Mubadala and Trafigura will be the controllers of the port, but not MMX’s.<\/p>\n
According to a press statement released by MMX, in case the deal is confirmed, MMX Porto Sudeste will have the funds to complete construction of the port, located in Rio de Janeiro. Also, MMX Mining will be free from debt. Superporto Sudeste will have a capacity to ship 50 million tonnes of iron ore per year upon completion. The facility started being built in 2010, and according to MMX it should become operational early next year. The port may undergo expansion works, eventually allowing for a throughput of up to million tonnes per year.<\/p>\n
The memorandum of understanding also sets forth that MMX will have the right to ship out up to 7 million tonnes of iron ore through the new port, with an option to increase that volume to 13 million tonnes, provided that it exercises the option by June 30, 2015. The company’s iron ore shipments may grow proportionally in case the new controllers execute the port’s expansion plan. The document states that MMX will have the option to acquire a 7.5% stake in the company, apart from the stake it already holds.<\/p>\n
Other deals <\/strong><\/p>\n If Mubadala does become the controller of MMX Porto Sudeste, it will not be the Abu Dhabi fund’s first association with Eike Batista. On March 26m 2012, Mubadala announced a US$ 2 billion investment in exchange for a 5.6% stake in a holding company owned by Batista, including indirect stakes in the group’s publicly traded companies like OSX, OGX, MMX, LLX and MPX. Stakes in private companies, i.e. those not traded in the Stock Exchange (AUX, REX and IMX) were also involved in the deal. <\/p>\n This was not the sole announcement made this Tuesday by Batista’s companies. The energy company MPX has disclosed a “material fact” to Brazil’s Securities Commission (Comissão de Valores Mobiliários, CVM) communicating that the businessman is negotiating his stake in the company. According to the communiqué, however, the deal has not been signed yet. Out of MPX’s total shares, Germany’s E.ON holds 38%, the market holds another 38% and Batista holds 24%.<\/p>\n Batista was once the richest man in Brazil and the world’s 8th richest. His businesses started losing value in 2011, as his companies failed to deliver the results promised to investors. In that year, Batista ceased to rank among the world’s billionaires, and started relinquishing control over some of his companies. By last year, he was worth an estimated US$ 30 billion, according to news agency Bloomberg<\/em>’s list of the world’s richest. By August this year, Bloomberg <\/em>listed his wealth at US$ 200 million.<\/p>\n In turn, the United States’ Forbes <\/em>magazine, which listed Batista as the world’s 7th richest man in 2012, has removed the businessman from its billionaire ranking early this month. This week, his oil company OGX has called on him to inject US$ 1 billion into the enterprise. He has questioned the decision.<\/p>\n This Tuesday, on the São Paulo Stock Exchange (Bovespa), MMX stock was down 9.65%, selling for R$ 2.06.<\/p>\n *Translated by Gabriel Pomerancblum<\/strong><\/p>\n