Germans Buy in to MPX

MPX Energia, the Brazilian coal and electricity company controlled by Eike Batista, has sold a 10% position in the company to German utility E.ON for BRL850m ($471.6m). The companies also signed a joint venture agreement to develop renewable energy ventures in Brazil and Chile, MPX says. The deal contemplates a BRL1bn capital increase, of which E.ON will provide BRL850m and shareholders will see an equity offering at BRL55.00 a share. The deal between the new partners has several moving parts. In an initial step, MPX debenture holders will convert their debentures into MPX shares. MPX’s coal assets in Colombia will then be bundled into a new company, CCX, with a BRL814m cash infusion and be spun off. For its part, MPX will bring projects with an 11,000MW capacity into the 50-50 joint venture, including Acu Power projects in Rio de Janeiro, Chile’s Castilla project, the TPP Parnaiba expansion and the Sul and Seiva power plants. E.ON will also retain a call option in the JV to buy an additional 38.9% of the Acu Power venture at book value. Officials at MPX and E.ON could not immediately be reached for additional comment. MPX has long sought to launch an IPO for its Colombian coal mining assets in CCX and many have expected the sale to generate as much as $5bn. Last June, the company issued BRL1.37bn in convertible debentures, of which BRL600m went to BNDES, BRL200m to Gavea, BRL200m to Batista and BRL369m to minority shareholders.