UPDATE 1-Brazil's LLX in advanced talks to refinance Bradesco, BNDES loans

Mon Aug 19, 2013 11:48am EDT

By Guillermo Parra-Bernal

SAO PAULO Aug 19 (Reuters) - Brazil's LLX Logística SA said it was in advanced talks with state development lender BNDES and private-sector bank Banco Bradesco SA to refinance 863 million reais ($360 million) in short-term debt, a move that might be a key prerequisite of its proposed sale.

LLX owes principal of 518 million reais to BNDES and 345 million reais to Bradesco, a company spokeswoman said in a phone interview. While the BNDES loan matures next month, the Bradesco loan comes due in February, she added.

U.S. investment group EIG Global Energy Partners LLC has an agreement to buy a controlling stake in LLX, which was founded by and remains under control of tycoon Eike Batista's Grupo EBX, for about $560 million. Refinancing the loans is a condition of the deal between EIG Partners and LLX, newspaper Folha de S. Paulo said on Monday, citing a source with direct knowledge of the situation.

"The company is currently negotiating a rollover of those debts," said the spokeswoman for Rio de Janeiro-based LLX. "The status of those talks is advanced."

LLX also owes Bradesco 467 million reais in a loan that matures at the end of next year. The company declined to comment on terms of its negotiations with EIG and Batista, citing several clauses of confidentiality.

Bradesco declined to comment, citing banking secrecy rules. Calls to several BNDES representatives in Rio de Janeiro were not answered.

Batista, whose fortune was ranked by Forbes Magazine as the world's seventh-largest last year, is selling assets in his struggle to keep some of the EBX companies afloat, and he is using cash to reduce debt. In recent weeks, Batista has renegotiated debts with Abu Dhabi sovereign wealth fund Mubadala Development Co PJSC and local banks Itaú Unibanco Holding SA and Bradesco, sources told Reuters.

LLX AND EIG

Shares of LLX rose 9 percent to 1.74 reais on Monday. The stock, which is down 50 percent this year, has more than doubled over the past 30 days, mainly on speculation of a potential merger with or acquisition by a rival.

Batista agreed to cede control of LLX to EIG Partners on Wednesday, one of the biggest steps in the breakup of Grupo EBX. Washington, D.C.-based EIG will invest 1.3 billion reais in LLX, providing enough cash to help finish the Port of Açu.

EIG is interested in buying more assets from Batista, a source familiar with its plans said on Monday. EIG, however, is not actively negotiating with EBX.

Forced by debt woes to dismantle an energy, port and mining empire that had been worth $35 billion last year, Batista is seeking partners or buyers for oil company OGX Petróleo e Gás Participações SA, iron ore miner MMX Mineração e Metálicos SA, shipbuilder OSX Brasil SA and coal miner CCX Carvão da Colombia SA.

If the LLX deal is approved, EIG will get the assets for a fraction of what they would be worth if the Port of Açu realizes its potential. Companies such as U.S.-based General Electric Co , which builds power plants for offshore oil platforms, and France's Technip, a major offshore oil engineering contractor, have agreed to buy land at the port.