Bankruptcy of Eike Batista’s Mining Company MMX Is Declared by the Court of Minas Gerais

The Mining Company MMX Sudeste, Owned by Businessman Eike Batista, Had Its Bankruptcy Declared by the 1st Business Court of Belo Horizonte, Minas Gerais

In a notice released yesterday to the market, MMX Mining informed that it became aware of the decision by the 1st Commercial Court of Belo Horizonte, in the state of Minas Gerais, regarding the announcement of the bankruptcy of its subsidiary. MMX Sudeste Mining is a company owned by businessman Eike Batista. The ruling by Judge Cláudia Batista was based on the company’s non-compliance with the Judicial Recovery Plan (PRJ), which was sufficient to support the request.

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Bankruptcy Decree of 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 Declared the Mine’s Bankruptcy, but Eike Batista’s Lawyers Appealed to Reverse the Decision. MMX Claimed That the Bankruptcy Ruling Accepted the Request of the Judicial Administrator Without Prior Action of the Company, in Which It Did Not Have the Opportunity to Exercise the Right of Defense.

The mining company also explained that if the bankruptcy is confirmed, the PRJ will need to be restructured (currently being prepared and will need to be submitted to creditors), as the exploration of the Bom Sucesso mine, the main asset of MMX Sudeste, will no longer be viable.

After the news, trading of MMX shares was suspended yesterday by B3, which waited until 2 PM (Brazilian time) to obtain information about the company’s measures to deal with the bankruptcy of its subsidiary. The impact of Eike Batista’s mining company’s bankruptcy decree, among other information, will influence its business, even if they appeal the decision.

Eike Batista’s Mining Company Intends to Appeal

In a statement released, MMX, Eike Batista’s mining company, plans to appeal the decision of the 1st Commercial Court of Belo Horizonte and the ruling to the Court of Justice of Minas Gerais (TJ-MG).

MMX explained that if the bankruptcy is confirmed, the “Judicial Recovery Plan” will need to be restructured, 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 may have a significant impact on the terms and conditions established with China Development Integration on March 25, 2021, as the decree is the reason for the contract termination. Furthermore, the mining company highlighted that the bankruptcy of MMX Sudeste may significantly impact MMX’s judicial recovery, as its subsidiary is one of its main assets, and the company has been undergoing judicial restructuring since 2014.

The MMX announced that it is seeking investors to provide an instrument that will secure the investment of US$ 50 million, in accordance with the terms and conditions of CDIL, however, negotiations in paper will take a long time to resume. The price of Eike Batista’s mining company’s shares resumed trading at 4:10 PM, with a drop of 26.65%, at a value of R$ 18.85 (4:34 PM).