Bloomberg News

LLX Advances on Deal to Lease Space at Acu Port: Sao Paulo Mover

December 20, 2012

LLX Logistica SA (LLXL3), the Brazilian port operator headed by billionaire Eike Batista, surged the most in a week after agreeing to lease space at its Acu complex to the local unit of French steel-pipe-maker Vallourec SA. (VK)

LLX rose 5.4 percent to 2.33 reais at the close of trading in Sao Paulo. It was the biggest gainer on Brazil’s benchmark Bovespa index, which rose 0.5 percent.

The stock had plunged 45 percent from this year’s high in March as projects by companies including Ternium SA (TX:US) and Anglo American Plc (AAL) expired or were postponed. Today’s announcement, combined with an agreement last month with General Electric Co. (GE:US), may bring new momentum to Batista’s plan to build what he calls a “superport” at Acu, about 200 miles north of Rio, according to Victor Mizusaki, an equity analyst at UBS AG. (UBSN)

“These announcements confirm that large companies have interest to construct a facility in the industrial complex,” Mizusaki wrote in a note to clients today.

V&M do Brasil SA, Vallourec’s local unit, will build a logistics base at LLX’s Acu port to service oil companies that operate in the Campos basin under a 20-year agreement, LLX said in a regulatory filing late yesterday. Vallourec is based in Boulogne Billancourt, France.

Acu is the centerpiece of Batista’s plan to integrate his commodities and oil empire and tap Chinese demand for Brazil’s raw materials. The port could become the world’s third-biggest by attracting investments from oil-storage facilities, steelworks and car plants, he said in an interview in March 2011.

Batista Empire

Batista also has interests in the oil and mining industries through companies including OGX Petroleo e Gas Participacoes SA and MMX Mineracao e Metalicos SA.

GE last month agreed to build an oil, gas and energy unit at the port, according to an LLX filing.

The Vallourec and GE contracts may generate about 11.7 million reais ($5.7 million) in annual revenue for LLX, Mizusaki wrote.

LLX had adjusted revenue of 52.6 million reais in the first nine months of this year, compared with 2.4 million reais in the same period of 2011.

A preliminary accord between Ternium, the steelmaker indirectly controlled by billionaire Paolo Rocca’s family, and LLX to build a mill at Acu expired Sept. 30 without a final accord. Nissan Motor Co. chose to set up a $1.4 billion unit elsewhere, and Anglo American delayed by a year the start of its Minas-Rio project, which includes completing an iron-ore terminal at the port.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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Companies Mentioned

  • TX
    (Ternium SA)
    • $17.62 USD
    • -0.66
    • -3.75%
  • GE
    (General Electric Co)
    • $25.64 USD
    • 0.02
    • 0.08%
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