Auction to sell Eike Batista’s ‘secret’ fund fails

This Tuesday (16) the third attempt to sell securities from a secret fund owned by Eike Batista, which would be used to reimburse creditors of the mining company MMX Sudeste, base of the businessman’s former economic empire and now in bankruptcy proceedings, failed.

The auction asked for R$ 1.25 billion for the papers, a value considered exaggerated by Abradin (Brazilian Association of Investors), which discovered the assets hidden under a web of investment vehicles by the businessman.

With the failure of the auction, the administrator of the bankrupt estate of MMX, Bernardo Bicalho, can choose to negotiate the bonds directly with investors. In the first sale attempt, in 2021, Argenta Securities had offered BRL 612 million for the shares.

The offer, however, was suspended by the Justice of Minas Gerais after pressure from Eike, who intended to use the funds to pay his plea bargain. A second auction was held in June, but there were no bidders either.

The president of Abradin, Aurélio Valporto, assesses that the comings and goings harmed the sale of assets. “The messy procedure ended up scaring off foreign investors,” he says.

The bankrupt estate of MMX tries to sell debentures that were acquired by Eike as part of the payment made by Anglo American for the purchase of the Minas-Rio complex, which includes a mine and a pipeline linking Minas Gerais to the coast of Rio de Janeiro.

They belonged to a company called NB4, which is the last link in a three-tier investment structure and, therefore, were unknown to both minority shareholders and managers of the bankrupt estates of the group’s companies.

Its discovery generated a legal dispute between the administrators. The trustee of another bankruptcy of the group, MMX Mineração e Metálicos, asked the Justice for information about the debentures, with the aim of including them in the bankrupt estate he manages.

The two companies were part of the mining arm of the X group. MMX Mineração e Metálicos acted as a holding company, with MMX Corumbá and MMX Sudeste under it. The judicial recovery of Mineração e Metálicos took place in Rio de Janeiro, and that of Sudeste, in Belo Horizonte.

The failure of the auction frees the administrator of the bankrupt estate of MMX Sudeste to go back to negotiating with Argenta, an offshore company based in the British Virgin Islands that would belong to the family of Jair Coelho, a businessman who died in 2001, known as “King of Quentinhas” for controlling the supply of food to public agencies in the state.

The report contacted the judicial administrator of MMX Sudeste, but has not yet received a response. Eike’s defense has yet to be found.