Ecuador court gives green light for Silvercorp, Salazar’s El Domo project
The ruling removes the last major obstacle for the $250 million project, located 150 km northeast of Guayaquil.
Beleaguered Brazilian businessman Eike Batista not only is selling a controlling stake in one of his companies, the LLX logistics firm, for US$560 million (1.3 billion reais), but it is also on the verge of losing its iron ore miner MMX Mineração e Metálicos SA, MMX.
In a filing with the Brazilian Securities and Exchange Commission Wednesday night, the magnate confirmed that US-based EIG Global Energy Partners, would acquire LLX.
According to Reuters, MMX —the core of Batista’s EBX Group— is in advanced negotiations with potential bidders. The country’s tax agency struck the iron ore company with a $1.8 billion tax fine, an amount equivalent to nearly 80% of its market value, in January. Two months later, the firm reported a much-higher-than-expected $400 million loss.
The loses added to Batista’s existing financial woes. By then he already had $2.8 billion in outstanding loans with the Itau Unibanco Holding SA in Sao Paulo. Additionally, he owes $2.4 billion to Banco Bradesco SA plus another $805 million to Grupo BTG Pactual, which also gave him a $1 billion line of credit.
His lenders are growing anxious, and market rumours indicate the mining magnate will have to reorganize — and subsequently lose control of — his declining empire.
To avoid this and raise cash, Batista —who lost the title of Brazil’s richest person in 2012— said earlier this year his holding would need to undergo some strategic changes, due to “the deterioration of coal market conditions.”
Last year, he sold part of his EBX to General Electric Co. and Abu Dhabi’s Mubadala Development Co. Batista’s also been trying to sell all of his gold company AUX, as well as shipbuilder OSX Brasil SA. Batista is also reportedly in talks to sell MPX to Germany’s E.ON.
Batista’s wealth, estimated only last year at more than $30 billion, has shrunk to a net $200 million, according to the Bloomberg Billionaires Index.
The tycoon, who owns five public companies, famously said in 2008 – when his fortune was put at $6.6 billion, ranking him at No. 142 on the Forbes list – that his goal was to become the richest man in the world in five years.
Fast-forward to 2013 and the one time international icon of Brazil’s economic strength is struggling to recover investors’ trust in his shrinking business empire.
