Valuable asset of former billionaire Eike Batista was sold by a British Virgin Islands brokerage; large Brazilian bank has its name linked to the operation

Argenta Securities, a British Virgin Islands-based brokerage, has auctioned off the last valuable asset of former billionaire Eike Batista. A source from Veja magazine says that the brokerage already has a buyer to transfer the asset and claims that the buyer is XP Investimentos, a consortium led by a large Brazilian bank.

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Eike Batista's most valuable asset is a debenture, issued by the mining company Anglo American as part of the operation to sell the Minas-Rio complex from MMX to the multinational in 2008.

The asset, which has an estimated value of around US$200 million, was mapped by the Brazilian Association of Investors (Abradin), and sold for R$612 million by Argenta.

The amount will be used to pay the debts of MMX, Eike's mining company, which was declared bankrupt

According to Veja, the brokerage has until the end of the first half of this month to make the payment. The money will be used to cover the debts of MMX, Eike's mining company, which was declared bankrupt last year.

Argenta is represented in Brazil by Jorge Lima Coelho, son of the late businessman Jair Coelho, who became known in Rio de Janeiro as the “King of Quentinhas”. Fábio Galvão, former director of the CVM, is one of the lawyers representing the brokerage in the country.

Argenta answered the reasons for acquiring the asset to the Veja column: “We saw an opportunity in the acquisition of the debentures seized by the 1st Corporate Court of BH due to the particularities of this debenture, as there is strong consolidation in the sector as recently announced by Vale”, he says.

“There is interest in royalty funds, as Minas-Rio ore has a high calculation, super premium, in addition to consistent operating results.” The broker closes the note by saying that the “acquisition is syndicated, involving a large hedge funds American and two financial institutions in Brazil.”

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 mines of gold, renewable energy and nanotechnology. This is how the Brazil Journal exclusively reports.

Despite having faced prison, fines and lawsuits, Eike did not give up on his projects and continued to work his brilliant mind 24 hours a day to get these new businesses off the ground, which had as an obstacle the limitation of capital, since his image and credibility as an entrepreneur is not among the most quoted by national and international investors.

Enter China Development Integration Limited (CDIL), an investment vehicle linked to the Chinese government and based in Hong Kong, a heavyweight investor who shares his appetite for grandiose projects and is willing to carry it with Eike.

For those unfamiliar, CDIL has been an active participant in the Belt and Road Initiative, the project through which China has increased its geopolitical power by investing in the infrastructure of dozens of countries around the world since 2013.

The person largely responsible for the marriage between the Chinese and Eike was Rubicon Capital Partners, a management company recently created by Pedro Pinto Guimarães, an executive from Rio de Janeiro who spent more than five years at PetroRio and left the oil company a year ago. While at PetroRio, Guimarães met Chinese and Saudi investors who were analyzing co-investments with the company.

Eike will have seemingly infinite capital to put his projects into practice in Brazil

The new deals 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 for provide machines, equipment and services, and, when it comes to commodities agricultural or metallic, will guarantee the purchase of production in the form of offtake agreements.

Eike “is one of the greatest developers of natural resources in history,” CDIL chairman Andy Lai told the Brazil Journal in a Zoom video call from Hong Kong. “He developed one of the largest mines in the world [the Minas-Rio project, which today belongs to Anglo American], he knows the data on the large reserves still unexplored, and he set up the largest infrastructure projects in Brazil. For us, leveraging their knowledge and experience is wise.”

According to the Brazil Journal, the Chinese asked for the interview as a way of introducing themselves to Brazilian society and market agents. According to Lai, the Chinese and Eike have something else in common: a head that thinks about projects with horizons of 30, 50 years.

“The Chinese saw Açu, OGX and MMX and they said, 'Eike thinks a lot like us, but all that he did is something for governments to do, it's on a government scale', said Pedro Guimarães, from Rubicon. According to him, Eike will contribute with his “structuring head”, and the CDIL will help with management capacity.

Partnership between China and Eike will reach tens of billions of reais, from mining to infrastructure in Brazil

For the Chinese CDIL, its joint investments with Eike will reach tens of billions of reais, from mining to infrastructure. The group hired Lefosse to represent it in Brazil.

To execute the projects, the partners set up a holding company in Hong Kong: CDIL will have a majority stake, but “more or less 50/50”, said Edmond Amir, a French executive specializing in financial modeling of large projects who is the head of CDIL's international area. As part of the agreement, the Chinese will pay the BRL 800 million fine that Eike will have to pay as part of his agreement with the Attorney General's Office.

The mining company MMX is the first test of the new partnership, and announced last week that the CDIL is negotiating with the creditors the company's debts and that it intends to take it out of the judicial recovery.