MMX Bankruptcy, By Eike Batista, Is Suspended By Justice Of MG And Mining Company May Boost Brazilian Mining Market

After Being Filed for Bankruptcy at the Beginning of the Month, MMX Sudeste, Eike Batista’s Mining Company, Managed to Suspend the Bankruptcy in the Court of Minas Gerais (MG) and Its Contract with the Chinese Group CDILL for R$ 50 Million May Boost the Mining Sector

The mining company MMX Sudeste, in a lawsuit in the MG court that has been ongoing since 2014, managed to suspend the bankruptcy in the 1st Business Court of the District of Belo Horizonte after filing an appeal. Eike Batista’s mining company argued that it was not given the opportunity to respond to the decisions of the Judicial Administrator to convert the judicial recovery into bankruptcy.

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MMX Mining, Eike Batista’s Company, Issues Statement on the Process in MG

According to MMX Mining, the decision to convert judicial recovery into bankruptcy could not have been made without MMX Sudeste being able to respond to the claims presented by the Judicial Administrator regarding the alleged disorder of the company’s recovery plan in the MG court.

The Bankruptcy of Other Mining Companies of Eike Batista

Last Wednesday, MMXM3 and MMX Corumbá, also owned by Eike Batista, had their bankruptcy decreed, which directly impacted the shares of the mining company, which fell 27%, going to R$ 14.67.

The assets of the mining companies had their negotiations interrupted. Eike Batista’s mining company also reported that the bankruptcies could directly interfere with the Term Sheet, a document with investment conditions with the Chinese group CDILL, in which it committed to invest around R$ 50 million in MMX to boost the mining market.

The Bankruptcy of MMX Sudeste in MG and Controversies with the Chinese Group

The bankruptcy decision at the beginning of the month was decreed by Judge Claudia Helena Batista, of the 1st Business Court of the District of Belo Horizonte (MG), which oversees the judicial recovery of Eike Batista’s company. The controlling entity had already stated that the decision was provisional and subject to appeal, as has happened. As mentioned before, this would directly impact the agreement with CDILL.

Since the announcement of the partnership, some suspicions have arisen as although CDILL promised to invest US$ 50 million in the mining company, the investor reportedly only had a capital of US$ 128.60 according to a survey conducted by the Brazilian Association of Investors (Abradin) in the investor registry of Hong Kong. In the petition to avoid the bankruptcy of MMX Sudeste, the investment from CDILL was the primary argument used to delay the decision.