SAO PAULO AND RIO – Failed the second judicial auction to sell debt securities of the Anglo American mining companywhich belonged to the entrepreneur Eike Batista and were included in the bankruptcy of the MMX mining company, according to sources familiar with the subject. At the hearing to open envelopes, on the afternoon of this Tuesday, the 16th, there were no formal proposals for the purchase of the bonds (“participatory debentures”, which have special characteristics).
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Four envelopes were delivered last week, but none with a formal proposal. There were only mere signals of interest, as the Estadão. The four envelopes delivered were from the BTG Pactualfrom Credit Suisse, and from foreign managers OakTree and Vox Royalty.
Tuesday’s hearing is part of a third attempt to sell Anglo’s shares. The batch of debentures stayed with Eike after the British mining company bought the Minas-Rio miningfrom MMX itself, in 2008.
The bonds were “discovered”, in 2021, within the tangle of companies created by the entrepreneur to control MMX. They ended up in the bankruptcy estate because, in the judicial reorganization of MMX, which is running in the Minas Gerais Court of Justice (TJ-MG), authorization was given for Eike’s personal assets and those of other companies linked to him to be included in the process. Thus, more possibilities were opened to reimburse creditors.
In this second judicial auction – the first attempt was a direct sale, at the end of 2021 –, the minimum bid was BRL 1.25 billion. Eike’s largest known debts amount to something close to BRL 2 billion – BRL 1.2 billion from MMX’s bankruptcy and around BRL 800 million from the whistleblower agreement closed in Federal Supreme Court (STF)within the scope of Operation Lava Jato.
There is, however, some uncertainty regarding the tax liability. The Federal Government charges R$ 3.5 billion from MMX, but this debt is subject to appeal and has no deadline to be paid.
According to sources who asked not to be identified, one of the points that generated discomfort and led to the failure of the second auction was the alternative, if the auction was not successful, to make a direct sale. This could become a legal questioning around the transparency of the process. The bank BR Partners and the manager Mahogany were the financial advisors of the process. “No one wants private sales. Given the uncertainties, interested parties are reluctant to place their bids,” said a source.
In early July, the first judicial auction – and second sale attempt – also failed. In this event, the minimum bid was US$ 350 million, around R$ 1.8 billion at the most recent exchange rate. This value was defined based on the proposal made by RC Group, which was taken by Eike to the bankruptcy process as, and motivated the convening of the first judicial auction. At the end of the first auction in early July, RC Group gave no guarantees that it would make the payment.
Columnist Malu Gaspar, from the newspaper “O Globo”, revealed that the firm belongs to Renato Costa, a Brazilian businessman based in the United States and that he would respond to at least 18 lawsuits in Brazil, including for issuing “bad checks” and disappearing with a rented car. In a statement, the RC Group regretted information about the company published by the press.
“RC Group, acting on behalf of international investors, identified the opportunity to acquire Eike Batista’s debentures as a good opportunity. However, noting a recent decision by the same group of investors, the RC Group declined to participate in the Auction”, says the note, sent by the company’s press office.