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Posted on March 26, 2012
DUBAI | Mon Mar 26, 2012 11:06am EDT
DUBAI (Reuters) – Abu Dhabi state investment fund Mubadala MUDEV.UL will invest $2 billion in Brazilian billionaire Eike Batista’s EBX Group, it said on Monday, the $46 billion fund’s biggest-ever foray into Latin America.
Mubadala, which has stakes in General Electric (GE.N) and private equity firm Carlyle CYL.UL, said it would make the investment in exchange for a 5.63 percent preferred equity interest in the Centennial Asset Brazilian Equity Fund, Batista’s personal investment company.
The investment comes as Batista’s EBX seeks to raise an additional $1 billion into his shipbuilding and ship leasing company OSX Brasil OSXB.SA. The company has also been raising debt and equity capital to speed up investment in oil and gas production, port construction, thermal power plants as well as iron ore and coal mines.
“This… transaction marks our first significant direct investment into one of the fastest growing markets and is an important step in Mubadala’s development of strategic opportunities in Brazil and Latin America,” Khaldoon al-Mubarak, Mubadala’s chief executive and managing director, said in a statement.
The investment, which Mubadala said was aimed at reinforcing EBX’s capital structure and funding new enterprises, will give the Abu Dhabi fund indirect interests in EBX’s listed holdings – including port operator LLX (LLXL3.SA), iron-ore producer MMX (MMXM3.SA) and petroleum unit OGX (OGXP3.SA).
Rio de Janeiro-based EBX also owns privately-held sports marketing, beauty and health care, gold mining, hotel, restaurant and entertainment assets.
While most EBX companies are in the start-up phase, Batista expects the group to generate $15 billion in annual operation earnings by the end of 2015, Batista, Brazil’s richest man, said in August.
The deal will also give Mubadala, which has assets worth around $46 billion, “participation in both EBX and Mr. Batista’s pipeline of future investment opportunities, such as technology companies, cement, fertilizers, entertainment and others,” the company said.
(Writing by Amran Abocar; Additional reporting by Jeb Blount in Rio de Janeiro; Editing by Reed Stevenson and Marguerita Choy)