Batista quits as LLX chairman as EBX breakup continues
SAO PAULO (Reuters) - Brazilian tycoon Eike Batista quit as chairman of Brazilian port operator LLX Logística SA (LLXL3.SA) on Wednesday, extending the break-up of his once high-flying EBX Group, a mining, shipbuilding, oil, energy and port conglomerate.
Batista, 56, and close adviser, Aziz Ben Ammar, have relinquished their seats on the LLX board, according to a securities filing. Roberto D'Araújo Senna, who was already in his second term as a board member, will replace Batista as chairman.
The departure comes after EIG Global Energy Partners agreed August 14 to invest 1.3 billion reais ($548 million) in LLX, providing enough cash to help finish LLX's Port of Açu north of Rio de Janeiro. Batista will keep his stock in LLX, but the new stock purchased by EIG under the deal will give the Washington, D.C.-based energy investment fund control of LLX.
After rising as much as 3.66 percent on the news in early trading in São Paulo on Wednesday, LLX stock trimmed gains. By early afternoon, the stock rose 0.61 percent to 1.65 reais.
New capital from the EIG transaction is likely to drive shares to between 1.70 reais and 2.70 reais, JPMorgan Securities analysts led by Fernando Abdalla said.
That estimate is less than a previous outlook of between 2.80 and 4 reais, because the new EIG stock will dilute the holdings of existing shareholders unless they, too, agree to buy new stock alongside EIG. The capital injection should conclude within 60 days.
Batista, who was listed as the world's seventh-richest billionaire last year by Forbes Magazine, has seen his fortune shrink by more than $25 billion over the past 18 months. Grupo EBX, whose companies were once worth as much as $60 billion, has suffered project delays, mounting debt and dwindling confidence in some of its main companies that has evaporated much of its market value over the past year.
Recent steps by Batista to become a minority shareholder in some of his Grupo EBX companies are helping the former billionaire shore up EBX. The value of EBX assets, comprising businesses from logistics to oil and gas, to mining and shipbuilding, is now less than $5 billion.
Batista was LLX's largest shareholder before the EIG deal, an agreement that came with his declaration that he would give up his personal seat on the board. He also said his stake would remain "relevant" and give him the right to pick a member of the board.
The breakup of EBX began early in July, when Batista stepped down as chairman of MPX Energia SA MPXE3.SA, EBX Group's most promising company, ceding control of the firm to Germany's E.ON SE (EONGn.DE).
($1 = 2.37 Brazilian reais)
(Reporting by Guillermo Parra-Bernal and Roberta Vilas Boas; Editing by Bernadette Baum and Jeb Blount)
- North Korea says Kim's powerful uncle dismissed for 'criminal acts'
- Thai PM calls snap election, protesters press on |
- Protesters fell Lenin statue, tell Ukraine's president 'you're next'
- Singapore hit by rare outbreak of rioting, 27 arrested |
- Venezuela's Maduro to raise pressure on business after local vote
Nelson Mandela: 1918 - 2013
Reuters looks at the life and times of Nelson Mandela, an icon of peace and reconciliation who came to embody the struggle for justice around the world. Video