Mubdala Takes Batista Stake in MMX

NEW YORK (The Deal) -- Abu Dhabi wealth fund Mubdala Development is to strengthen its equity exposure to Eike Batista's restructuring EBX Group by gaining a 10.5% stake in Sao Paulo-listed iron ore producer MMX Mineracao e Metalicos in exchange for debt.

EBX controlling shareholder Batista will give Mubdala almost 17.1 million MMX shares that were worth 24.4 billion reais ($10.7 billion) as of Monday's close. MMX said the share transfer is being made "in the context of the investment restructuring of Mubadala Development Company in EBX Group" and is subject to undisclosed conditions.

MMX said the transfer is expected to close in the third quarter.

"The company will keep its shareholders and the market in general informed of any update regarding the relevant assignment of shares," it added.

The agreement will take the MMX stake held by Batista affiliates down to about 48.8% from 59.3%, as MMX becomes the latest EBX Group company at which the tycoon has ceded control after debt problems emerging last year threatened to engulf the whole empire and forced several subsidiaries to seek bankruptcy protection.

Batista remains chairman of MMX. Last year he lost control of MPX Energia and LLX Logistica. In June the renamed EBX oil producer Oleo e Gas Participacoes gained creditor backing for a court-supervised agreement for a deal that hands most of the equity to a Pacific Investment Management-led creditor group.

The MMX stake transfer agreement comes after Mubdala and Netherlands trading company Trafigura Beheer in February closed a near-$1 billion deal for a 65% stake in the Porto Sudeste iron ore port owned by MMX.

MMX shares closed up 1.4% on Monday, at R$1.43. The share price was around R$12 a year ago.

Mubdala had 223.8 billion dirham ($60.9 billion) under management at the end of last year.

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