SAO PAULO, Sept 18 Brazilian miner Vale SA
said on Wednesday it plans to sell stakes in
its cargo transportation unit, VLI SA, totaling more than 60
percent in three separate deals that together could be worth
about 4 billion reais.
The stakes are to be sold to Canada-based Brookfield,
Japan's Mitsui and a Brazilian worker's fund.
An economic slowdown and falling world commodities prices
have caused Vale, the world's second largest mining company, to
scale back investments and seek partners for noncore aspects of
its business so it can focus on iron ore, the key raw material
Vale said in a statement it has already agreed to transfer a
20 percent stake in VLI to Mitsui & Co Ltd for 1.51
billion reais ($667 million).
Vale will also transfer 15.9 percent of VLI's capital to
FI-FGTS, a Brazilian government-managed retirement fund
administered by state-run bank Caixa Economica, for 1.2 billion
Vale retains control of VLI with 64.1 percent of its total
capital, it said; but if the Brookfield deal goes through, its
stake in the unit would fall to less than 40 percent.
No amount was given for the proposed sale of approximately
26 percent to Brookfield Brasil Ltda, a subsidiary of Brookfield
Asset Management Inc., as the terms are still being discussed.
Vale's chief executive, Murilo Ferreira, said the value of
the deal would be proportional to the other stakes sold, which
would bring the total value of the VLI sale beyond 4 billion
reais. Ferreira said additional shares could be sold later.
"Vale will have a minority participation when the three
shareholders have their parts," he told reporters in Brasilia
after meeting with President Dilma Rousseff. "In the future we
could see a public offering so the Brazilian and international
public can also be shareholders."
VLI is an "integrated cargo logistics company," and selling
more than half of it would not cause Vale to relinquish control
of its railways used to transport iron ore.
(Reporting by Caroline Stauffer, Reese Ewing, Jeb Blount and
Nestor Rabello; Editing by Leslie Adler)