Bloomberg News

Billionaire Batista in Talks to Sell $1 Billion EBX Stake

March 27, 2012

Brazilian billionaire Eike Batista, chairman of EBX Group Co. Photographer: Chris Goodney/Bloomberg

Brazilian billionaire Eike Batista, chairman of EBX Group Co. Photographer: Chris Goodney/Bloomberg

Eike Batista, who agreed to sell a $2 billion stake in his EBX Group Co. to Abu Dhabi’s Mubadala Development Co., is talking with other sovereign-wealth funds about receiving a further $1 billion investment to boost growth.

“There are other funds who are interested in coming in,” the Brazilian billionaire said late yesterday by telephone from Rio de Janeiro, without giving more details. “I don’t want to dilute myself, I just want to have enough cash to do everything my dreams take to. We want to be extremely comfortable.”

Batista is raising cash to develop his oil and mining assets and diversify into technology and entertainment. Yesterday’s deal to sell Mubadala 5.63 percent of EBX, a holding company that contains publicly traded crude producer OGX Petroleo e Gas Participacoes and shipbuilder OSX Brasil SA (OSXB#), implies a value of $33.5 billion for Batista’s remaining stake.

The Brazilian mining and energy magnate has seen his net worth surge 17.6 percent this year to $26.5 billion, making him the 11th richest person on Earth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s wealthiest.

The Mubadala sale would potentially propel him to 10th place on the index when the deal is completed on April 20.

Overtake Slim

Batista, 55, in an interview earlier this month, reiterated his goal to overtake Carlos Slim, currently the world’s richest man with a net worth of $70.7 billion, by 2015. Batista’s fortune fell $375 million yesterday after shares of OGX, his largest holding, fell 2.4 percent in Sao Paulo trading.

“Imagine me getting my engine and adding another turbo charger,” Batista said of yesterday’s deal and the boost to his wealth it’s given him in his attempts to overtake Slim.

Under the terms of the transaction, Mubadala will receive a 5.63 percent indirect stake in each of his publicly traded and closely held companies, Batista said in the interview. The fund will also own that stake in any of EBX’s new ventures, he said.

Batista is raising money to start businesses in industries ranging from fertilizers to precious metals while making investments in his existing commodity companies, including iron- ore producer MMX Mineracao & Metalicos SA (MMXM3), power-generation company MPX Energia SA (MPXE3), and port developer LLX Logistica SA. (LLXL3)

OGX, which has a market value of 50.2 billion reais, dropped 2 percent to 15.52 reais in Sao Paulo at 4:13 p.m. OSX fell 1.6 percent to 16.93 reais while MMX rose 0.2 percent to 9.42 reais. LLX declined 0.8 percent, and MPX gained 0.4 percent.

IPO Plans

Batista is proceeding with plans to sell shares in an initial public offering of gold explorer AUX and real-estate developer unit REX, potentially as soon as this year, he said.

The billionaire said earlier this month he may take on loans to fund a $1 billion cash injection in OSX, potentially adding to the $1.4 billion in debt he took on to buy Ventana Gold Corp. last year.

Batista is considering investing $2.5 billion in a plant to make electronic screens in Brazil through a joint venture with Foxconn Technology Group, a maker of metal casings for Apple Inc., he said Feb. 15. In October, EBX signed an agreement with Egypt’s Orascom Construction Industries for a fertilizers venture that may require $3 billion of investment.

EBX has entered the catering-services market through NRX- Newrest, a joint venture with Newrest Group Holding, and also started IMX, a partnership with IMG Worldwide Inc. focused on sports and arena management in Brazil.

Batista said yesterday is no longer interested in entering the coffee industry after EBX said earlier this year the magnate was studying “business opportunities” in that market.

To contact the reporters on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net or Dale Crofts at dcrofts@bloomberg.net


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