Batista Continues Courting Strategics

Brazil’s EBX continues to generate interest from foreign strategic investors, with a $300m investment from GE, and more is expected on the way. The US-based conglomerate is purchasing a 0.8% stake in Eike Batista’s Centennial Asset Brazilian Equity holding vehicle, the companies say, and is paying a similar price level to that seen in a $2bn sale of 5.63% to Abu Dhabi sovereign wealth fund Mubadala Development Company in April. Bankers say that this type of private, pre-IPO investment is preferable for large strategic investors looking at growth and commodity plays in LatAm, and to the companies themselves during periods of uncertainty in the public equity markets. Sovereign wealth funds and other strategic buyers are being increasingly pitched with these opportunities. “This type of long-term minority real money is healthy [for the region]. The trend is initially financials and natural resources, but it should be followed by other sectors,” says a New York-based LatAm investment banker. He adds that infrastructure should receive much more investment, noting that it is already some of EBX’s makeup, and that some investors, such as Canadian pensions, have been making infrastructure plays for a long time. EBX plans to use proceeds to further enhance its capital structure and finance its pipeline of future investments. The companies claim a previous relationship, which includes GE supplying equipment to Batista companies’ projects. Neither side responded to a request for comment on its advisors. The price paid is proportionally similar to that paid by Mubadala, which at the time was seen implying a $35.5bn valuation for EBX and around a 40% premium to market value, according to some analysts, though measuring them is difficult given that only 5 of the 11 Batista units are public. Batista has publicly announced plans to list shares of gold miner AUX and real estate unit REX, and EBX itself could eventually be floated. Shares of Colombian coal miner CCX are to begin trad