Judicial decision reaffirms that the company must fully manage the pulp and paper factory in the city of Três Lagoas (MS)

The first Reserved Chamber of Business Law of the São Paulo Court of Justice, in a decision by the judge José Benedito Franco de Godoi, decided that the company Paper Excellence will be allowed to fully control the Eldorado Celulose factory, located in the municipality of Três Lagoas in Mato Grosso do Sul.

This is a decision for the immediate transfer of shares held by J&F, Paper Excellence's look-alike. Thus, Paper, which is one of the largest paper and cellulose producers on the planet, will own 100% of the capital of the Eldorado factory, which is leader in pulp manufacturing in the country. Paper's shares currently total 49,41%.

The legal process involving the purchase of the Eldorado factory in Mato Grosso has been dragging on in court for four years. Between 2018 and 2021, the International Chamber of Commerce (ICC) understood that Paper Excellence was in good faith throughout the negotiation of the purchase and sale, so it decided unanimously (3 votes to 0) the company's right to assume the management of the Brazilian pulp producer.

J&F questioned the outcome of the arbitration in court, alleging that the sentence went beyond the limits of the arbitration agreement, that the company would have been spied on by the partner itself, with a cyber invasion, among other conflicts of interest not revealed by the arbitrators. In July of this year, Judge Renata Maciel, of the 2nd Business and Conflicts of Arbitration Court, had already considered the annulment action initiated by J&F to be unfounded and upheld the arbitration decision in favor of Paper Excellence.

The initial business agreement for the Eldorado Celulose factory, signed in September 2017, was worth BRL 15 billion. However, there was no conclusion due to disagreements between the brothers Wesley and Joesley Batista, from J&F, and Asian businessman Jackson Widjaja, owner of Paper Excellence. This is already considered the biggest litigation in Brazil at the moment.

Paper's goal is to expand Eldorado

With this further court victory, Paper Excellence in Brazil should begin its plans to expand Eldorado Celulose (Vanguarda 2), with an optimistic perspective on the creation of new jobs. The company foresees an investment of approximately R$ 10 billion, which will promote thousands of jobs in the region.

The construction of this second pulp production line in Brazil had been blocked since the beginning of the corporate dispute over Eldorado. Paper Excellence operates in the manufacture of long and short fiber pulp, high yield pulp and also paper.

“Our focus now is to integrate well with Eldorado's operating team. We recognize the great work that has been carried out in the company. We have plans for Eldorado employees. The certainty is that, together, we will write a bright future”.

Cláudio Cotrim – CEO of Paper Excellence in Brazil

In July, Paper Excellence closed an agreement to acquire all common shares of the North American Resolute Forest Products, a global leader in the forest products industry. Last year, the company announced the purchase of Domtar, the largest retailer of printing and writing paper in the United States. In 2019, it had incorporated three production units of the Canadian Catalyst Paper, in addition to a distribution center and a new headquarters.

J&F will continue to fight in court alleging corruption

J&F sent a note to Radio CBN in Campo Grande (MT), informing that it intends to appeal against the latest court decision. “J&F Investimentos will continue to defend its right to annul an arbitration award tainted by espionage, which has already resulted in the indictment of the highest executives of Paper Excellence and its subordinates, in addition to the failure of the duty of disclosure and signs of corruption. This is a precarious order and that J&F is sure will be reviewed”, says the note.