MMX Mineracao & Metalicos SA (MMXM3), the iron-ore producer controlled by Brazilian billionaire Eike Batista, fell to a six-week low after changing its chief executive officer for the second time in 15 months.
MMX declined 2 percent to 3.90 reais in Sao Paulo, the lowest since Dec. 7. MMX has dropped 48 percent in the past 12 months.
Carlos Gonzalez, mining director at Batista’s EBX Group Co., will replace Guilherme Escalhao, 50, who is resigning from the company, Rio de Janeiro-based MMX said in a Jan. 18 regulatory filing. Escalhao was named CEO in October 2011 after Roger Downey resigned. Management turnover is a risk for investors in MMX, which replaced its chief financial officer three times in the same period, according to HSBC Holding Plc.
“This management change was largely unexpected by the market,” HSBC analyst Jonathan Brandt said in a note to clients Jan. 18. “Continued management changes have had a negative effect on project execution, with the six-month delay in the Sudeste Superport to the end of 2013 being the most recent example.” He has a neutral recommendation on the stock.
Escalhao is the fifth CEO of the six publicly traded companies controlled by Batista to be replaced since June. EBX named Otavio Lazcano as CFO on Aug. 6, replacing Nicolau Chacur.
Gonzalez, a former Vale executive, joined EBX in 2005, the company said in its filing. He left in 2008 to work as chief operating officer of Anglo American Plc (AAL)’s Minas-Rio iron-ore project in Brazil, and he returned to EBX in 2011.
MMX’s press office declined to comment on the reasons for Escalhao’s departure when contacted by Bloomberg on Jan. 18.
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