Dutch energy firm Trafigura Beheer BV and Abu Dhabi's sovereign wealth fund Mubadala Development Co will acquire an iron ore port in Brazil from Brazilian businessman Eike Batista in a $996 million deal.
Under the terms of the deal, Trafigura will take a 65-per cent stake in MMX Porto Sudeste Ltda, which is currently under construction, while Mubadala will hold the remaining 35 per cent.
Trafigura and Mubadala plan to invest $400 million in MMX Porto Sudeste Ltda to complete the port and iron ore terminal and will assume $596 million debt taken by MMX Sudeste Mineração SA, a subsidiary of Batista's EBX Group.
Both companies will also provide MMX Sudeste Mineração with $100 million in a trade finance facility. "The availability of financial resources, in line with this financing program, is a pre-condition to the approval of the transaction as a whole," the filing added.
MMX Porto Sudeste shall make available to MMX a port volume of 7Mtpa. In addition, MMX shall be granted an option to extend its port volumes from 7Mtpa to 13Mtpa. This option shall be exercisable at any time until 30 June 2015.
If Sudeste Superport is expanded, MMX shall have the right to increase its port volumes proportionally and have an option to acquire an interest in MMX Porto Sudeste of up to 7.5 per cent.
The Porto Sudeste is an iron ore port terminal located in the Rio de Janeiro, with an initial capacity to handle 50 million tons of iron ore per year.
The port began construction in 2010 and is designed to handle cape-size vessels (cape-size cargo ships are too large to transit the Suez Canal and have to use either the cape of Good Hope or Cape Horn).
The Port is expected to begin commercial operation mid-2014, and has development plans to increase its capacity to 100 million tons per year.
''We are pleased to be exploring Trafigura's participation in the Sudeste Superport development together with Eike Batista and Mubadala Development Company, and contribute our worldwide trading experience and global logistics infrastructure and expertise to the Brazilian mining industry,'' said Claude Dauphin, chairman of Trafigura.
Batista, chairman and controlling shareholder of MMX, said, ''We are pleased to announce an alliance with a team of world-class players committing to explore participating in the development of an EBX Group project. We firmly believe in Trafigura's unparalleled capacity to extract the full value of the Sudeste Superport.''