The mining company MMX Sudeste, owned by businessman Eike Batista, had its bankruptcy decreed by the 1st Corporate Court of Belo Horizonte, in Minas Gerais
In a note released yesterday, to the market, MMX Mineração informed that it became aware of the decision of the 1st Commercial Court of Belo Horizonte, in the state of Minas Gerais, on the announcement of the bankruptcy of its subsidiary. MMX Sudeste Mineração is a company belonging to businessman Eike Batista. Judge Cláudia Batista's sentence was based on the mining company's failure to comply with the Judicial Recovery Plan (PRJ), which was sufficient to support the request.
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Bankruptcy decree for Eike Batista's mining company was issued by the Court of Justice of Minas Gerais
In 2019, the 4th Commercial Court of Rio de Janeiro had declared the mining company bankrupt, but Eike Batista's lawyers appealed to reverse the decision. MMX claimed that the bankruptcy decision accepted the request of the trustee without the company's previous performance, in which it did not have the opportunity to exercise the contradictory.
The mining company also explained that, if the bankruptcy is confirmed, the PRJ will need to be reformulated (currently in preparation and must be submitted to the creditors), because the exploration of the Bom Sucesso mine, the main asset of MMX Sudeste, will no longer be viable.
After the news, trading in MMX shares was interrupted yesterday by B3, which waited until 14 pm (Brasília time) to obtain information on the company's measures to face the bankruptcy of its subsidiary. The impact of the bankruptcy decree on Eike Batista's mining company, among other information, will influence their business, even if they appeal the decision.
Eike Batista's mining company intends to appeal
In a disclosed information, the mining company MMX, owned by Eike Batista, intends to appeal the position of the 1st Commercial Court of Belo Horizonte and the decision to the Court of Justice of Minas Gerais (TJ-MG).
The mining company MMX, owned by Eike Batista, explained that, if the bankruptcy is confirmed, the “Judicial Recovery Plan” will need to be reformulated, and that it is evaluating the best strategy to be adopted to reverse the decision and its impacts, in order to preserve the interests of its shareholders and creditors.
MMX and the contract with China Development Integration
According to the statement, the bankruptcy of MMX Sudeste could have a significant impact on the terms and conditions signed with China Development Integration, on March 25, 2021, as the decree is the reason for the termination of the contract. In addition, the mining company highlighted that the bankruptcy of MMX Sudeste could significantly impact MMX's judicial recovery, as its subsidiary is one of its main assets and, since 2014, the company has undergone a judicial restructuring.
A MMX disclosed that it is looking for investors to provide an instrument that will guarantee the investment of US$ 50 million, in accordance with the terms and conditions of the CDIL, however, paper negotiations will take a long time to be resumed. The share price of Eike Batista's mining company was traded again from 16:10 pm, down 26,65%, to R$ 18,85 (4:34 pm).
