Brazil Raising $500 Million to Pay Creditors of Fallen Businessman Eike Batista -- Update
01 Junho 2022 - 4:48PM
Dow Jones News
By Paulo Trevisani
Brazilian officials are auctioning a 25-year bond in an effort
to raise at least $500 million to pay creditors of fallen
entrepreneur Eike Batista.
The bond, issued by London-based miner Anglo American PLC, was
part of a payment for an iron-ore operation in the Brazilian state
of Minas Gerais, said Ricardo Lacerda, chief executive of Brazilian
investment bank BR Partners Banco de Investimento SA.
A judge at the first business court in the state capital of Belo
Horizonte who handles the bankruptcy process ordered the auction
and hired BR Partners to manage the auction.
Mr. Lacerda said the bond doesn't have a face value. Instead, it
pays a 2.4% royalty over the production of the mining operation,
called Minas-Rio, between 2025 and 2049. He said the bond was part
of the payment when Anglo American acquired the operation.
"Our goal is to obtain the highest payoff for the creditors,"
Mr. Lacerda said. He referred to some estimates that the bondholder
stands to receive up to $6 million a month under the bond's
covenant, depending on the mine's production. "It is a mine that
already has a steady output," he added.
Anglo American acquired control of two iron projects from MMX
Sudeste Mineração S.A. in 2008 for around $3.4 billion at the time.
One of the projects was Minas-Rio.
An Anglo American spokesman didn't have immediate comments.
MMX was part of Mr. Batista's conglomerate, the EBX Group.
The entrepreneur, who rode the commodities boom in the early
2000s to build an industrial empire and amass a fortune once
estimated at more than $30 billion, went bankrupt after a series of
business setbacks.
Mr. Baptista was also accused of paying bribes to top Brazilian
government officials to advance his business interests.
Some of the charges were part of the sprawling corruption
investigation known as Carwash, which landed several prominent
Brazilian politicians and businessmen in jail. Mr. Batista himself
served a little more than three months and cut a plea deal with
federal prosecutors.
Part of the proceeds from the Anglo American bond sale will go
toward a payment Mr. Batista agreed to in the plea deal, according
to a person familiar with his business.
Mr. Batista now spends his days dealing with the bankruptcy
process and aims at paying off his debts to resume normal
activities, the person said.
Mr. Lacerda said he expects to receive offers from 30 to 40
local and international investors and whoever offers the highest
price for the bond will win the auction. He expressed hopes the
sale will raise at least $500 million. He said although the sale
will go to a single offer, participants may group together and
split the costs and proceeds.
Offers will be collected for the next 30 days and then submitted
to the judge handling Mr. Batista's bankruptcy process, Mr. Lacerda
said.
Write to Paulo Trevisani at paulo.trevisani@wsj.com
(END) Dow Jones Newswires
June 01, 2022 15:33 ET (19:33 GMT)
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