Vale sells stakes in non-core assets

27 Dec 2013


Brazilian mining giant Vale SA has sold its entire stake in logistics firm Logistica Intermodal SA (Log-in) for approximately 233 million Brazilian reais ($99 million) through a stock exchange auction.

The miner has sold about 28.3 million common shares at 8.11 reais per share.

''The divestment of stakes in Log-in is consistent with Vale's strategy of reducing its exposure to non-core assets, and a result of its focus on discipline in capital allocation and value maximization for our shareholders,'' Vale said in a statement.

Log-in is a provider of integrated solutions for port handling and door-to-door freight forwarding.

Yesterday, the world's largest iron ore miner said that it has also divested the company's 44.25-per cent stake in Fosbrasil, a company that produces purified phosphoric acid in Cajati in the state of Sao Paulo for $52 million.

The transaction is subject to customary closing conditions and approvals including the approval by CADE, the Brazilian antitrust authority.

The action is consistent with Vale's strategy to prioritize investment in world-class core assets and at the same time is one additional step towards simplifying the company's portfolio, Vale said.

Last week, the company sold its $100-million stake in Norte Energia, a consortium building the Belo Monte dam in the Amazon

Earlier this week, Vale signed an agreement to sell 26.5-per cent stake in VLI SA, an integrated general cargo logistics company, wholly-owned by Vale, to an investment fund managed by Brookfield Asset Management, for 2 billion reais ($848 million).

Three months ago, the miner agreed to transfer 20-per cent interest in VLI to Mitsui & Co Ltd and 15.9 per cent to an investment fund managed by the Brazilian bank Caixa Economica Federal.

Further to the completion of the transactions, Vale will own 37.6 per cent in VLI.

The mining giant has sold assets worth around $5 billion this year including its $1.6-billion stake in Norway's aluminum producer Norsk Hydro last month, in order to significantly reduce capital expenditure and maximise value for shareholders.

Earlier this month, Vale said that it might sell minority stakes in its global fertilizer and coal business. It has also been reported that the miner might sell its 27-per cent stake in an ailing steel plant, a joint venture with Germany's ThyssenKrupp AG.

Iron ore spot prices that have peaked at around $187 a tonne in February 2011, have come down to around $132 a tonne and the price is forecast to be in the range of $100 and $140 in the next two years.

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