Brazil is one of the main investment targets of Fundo Soberano Mubadala, which targets wind farms in Bahia and troubled assets in the country
Sovereign Fund Mubadala, with around US$5 billion in assets in Brazil – including Petrobras' former RLAM refinery and three subway lines in Rio de Janeiro – has its eyes on the collapse of Eike Batista's commodities empire and, now, seeks more troubled assets in the country.
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That's an impressive turnaround from a $2 billion investment in holding Eike who almost disappeared in 2013, when it was proven that the former tycoon's oil wells were dry, which led to a three-year dispute to recover several of the businessman's assets, such as a stake in the company that owns Burger King and a commercial tower in the Leblon district of Rio.
Operation Lava Jato was an important moment for Mubadala. The Crown Prince of Abu Dhabi Fund entered into action to negotiate the purchase of a toll road in the state of São Paulo, from Odebrecht, leveraging the experience in Brazilian corporate debt and corporate restructuring that he acquired during 11 debt-for-equity swap transactions with Eike.
And it doesn't stop there: the focus on impaired assets remains. “We continue to focus on complexity, assets tied to former Lava Jato companies,” Fahlgren said.
Brazil is one of the main investment targets of the Mubadala Sovereign Fund
According to the executive, the company has just closed its first specific fund for Brazil, worth US$ 311 million, and is currently raising funds for a second, larger fund.
In total, Mubadala Capital has US$16 billion under management, and Brazil is one of its four main areas of investment, along with global private equity, venture capital and a hedge fund.
Mubadala's most recent investment was the acquisition of the RLAM refinery that belonged to Petrobras, for US$ 1,8 billion. The newly active is a bet on a competitive fuel market that is in the sights of consumers and politicians ahead of the 2022 presidential elections.
“Political turmoil is part of the country and it will not stop,” he said. “When we see temporary shifts in the market driven by an election, it is an opportunity to invest for the long term because of reduced competition.”
Mubadala aims to reduce RLAM's carbon footprint. While many investors have completely avoided oil projects for environmental reasons, the sovereign wealth fund sees an opportunity to cut emissions from existing infrastructure still in operation in the coming decades.
In addition to former millionaire Eike's assets, Mubadala is targeting wind and solar parks in Bahia
Mubadala is also eyeing wind and solar farms in Bahia to supply the refinery with as much renewable energy as possible. It also seeks to increase biofuel production at the facility and expand pipelines to eliminate the carbon-intensive use of tanker trucks for distribution.
In total, Mubadala estimates more than $1 billion in potential improvements. “We can put our capital into a polluting asset and make it better,” Fahlgren said.
Eike signs a partnership with China and gains 'infinite' capital to put oil and gas, mining, renewable energy and infrastructure projects into practice in Brazil
After seeing his empire go downhill, former billionaire Eike Batista has been busy nurturing a list of at least 11 projects that he calls 'unicorns', which include a gas pipeline linking Brazil to Paraguay, new gold mines, renewable energy and nanotechnology, as exclusively reports the Brazil Journal.
For those unfamiliar, CDIL (Chinda Development Integration Limited) has been an active participant in the Belt and Road Initiative, a project through which China has increased its geopolitical power by investing in the infrastructure of dozens of countries around the world since 2013.
The new business between the Chinese and the former billionaire will be as follows: Eike contributes his pipeline of projects (including assets and optioned assets) and the CDIL provides apparently infinite capital, in addition to carrying with it several Chinese banks and state-owned companies that will be responsible in providing machinery, equipment and services and, when it comes to commodities agricultural or metallic, will guarantee the purchase of production in the form of offtake agreements. Read the full story here.
