Reuters: Hot Stocks: UPDATE 1-Brazil's Batista close to losing 3rd EBX company, miner MMX

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UPDATE 1-Brazil's Batista close to losing 3rd EBX company, miner MMX Aug 15th 2013, 15:56 Thu Aug 15, 2013 11:56am EDT (Adds quotes, details) By Jeb Blount and Guillermo Parra-Bernal RIO DE JANEIRO Aug 15 (Reuters) - Brazilian tycoon Eike Batista is on the verge of losing a third company in his tottering EBX energy, port and raw-materials empire as bankers and potential investors accelerate talks to sell control of his iron ore mining unit. MMX Mineração e Metálicos SA, the original heart of Batista's EBX Group, will soon have a new controlling shareholder, Chief Executive Carlos Gonzalez said on Thursday. Talks with potential bidders for MMX, which owns several iron ore projects in Latin America, including the giant Serra Azul project in Brazil's southeastern highland state of Minas Gerais and a nearly complete iron ore port near Rio de Janeiro, are advanced and MMX has put nearly all activity outside of port construction on hold in deference to potential buyers. "We are reviewing all our company options and focusing on the port so that the new shareholder can make the decisions necessary to ensure the company's growth and expansion," Gonzalez said during a conference call with investors and analysts. It is the latest step in Batista's efforts to shore up EBX, which was once valued at $60 billion but suffered from a series of project delays and dwindling confidence that its largely start-up companies could deliver revenue and profit before being overwhelmed by debt. The value of EBX assets, which had soared on expectation that Brazil's China-driven commodities boom would continue, is now less than $5 billion. MMX shares plunged nearly 8 percent in early trading on Thursday after a late Wednesday announcement of a 441.5 million real ($189 million) second-quarter loss, but they trimmed losses during and after the conference call. In mid-day trading MMX shares were 2.1 percent lower at 2.37 reais in São Paulo. EBX said late on Wednesday that Batista will cede control of port operator LLX Logistia SA to Washington-based investment group EIG Global Energy Partners in exchange for a 1.3 billion investment in LLX. Batista receives no cash in the LLX deal. While he will resign from the board and lose control, he will retain a "relevant" stake in the company and have the right to appoint a director. Earlier this year Batista ceded control in his electricity generation, coal and natural gas company MPX Energia SA to Germany's E.ON. When EBX restructuring ends, Batista will be left with between $1 billion to $2 billion of assets and $1.7 billion of long-term debt, sources told Reuters. That is a sliver of his former fortune, which last year reached about $35 billion, according to Forbes magazine. MMX CEO Gonzalez also said the company has put its Corumbá mine up for sale along with other assets in hopes of finding investors that will shore up its dwindling cash position. He also said it is unlikely that MMX will sell its port near Rio de Janeiro separately as the buyer risks not having enough iron ore to move through the terminal without ore from MMX's Serra Azul project, which is linked to the port by rail. As part of the sale to a new controlling shareholder MMX is also likely to offer more stock to the general public and existing shareholders to raise additional capital, Gonzalez said. ($1 = 2.34 Brazilian reais) (Reporting by Jeb Blount and Guillermo Parra-Bernal; Editing by Kieran Murray and Leslie Gevirtz) Link this Share this Digg this Email Reprints

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