Brazil:
BNDES receives US$ 3.02 billion
check from winning consortium in
the CVRD Privatization Auction
Date: march 1998
Source: BNDES (http://www.bndes.gov.br)
On May 9th the "Consórcio Brazil" (Brazil Consortium), led by CSN and winner of the privatization auction of CVRD - Companhia Vale do Rio Doce, purchased 104,318,070 common nominative stocks, representing 41.73% of the voting capital, which will ensure its control of the company. On May 12, an Extraordinary Stockholders’ General Meeting will be held to appoint the new administration.
The director of the BNDES Financial Area, José Mauro Carneiro da Cunha, received the R$ 3,199,974,494.00 (US$ 3.02 billion) Banker’s check — the highest-value check ever issued in the country — at the Rio de Janeiro Stock Exchange from the hands of João Batista Fraga, General Director of the CLC - Câmera de Liquidação e Custódia (Clearing House), in settlement of the transaction.
The cerimony included the participation of BNDESPAR Director Durval Soledade, the Superintendents of the Legal Area, Cláudio Neves, of the Privatization Operations Area, Thereza Cristina de Aquino, and the Manager of the Capital Market Department, Carlos Vidinha. On this occasion, BNDES authorized the CLC to transfer the controling block of CVRD capital stocks.
The Bank and BNDESPAR received the Golden Shares, stocks which will grant the government special powers in CVRD and Valepar - Sociedade de Propósitos Especiais (Special Purposes Enterprise), which brings together the strategic investment partners of CVRD.
- Originally scheduled for April 29, the CVRD Privatization auction was finally held on May 6, following a legal battle. 143 lawsuits against the auction were brought forth and 26 preliminary orders were dismissed by the courts. A 19.99% premium over the minimum target price was achieved, equivalent to R$ 557 million.
- BNDESPAR will participate with R$ 360 million in Valepar capital (R$ 300 million had already been made available, plus the auction premium difference), which represents 4.8% of the CVRD capital and 9.8% of Valepar’s. BNDESPAR, Pension Funds and Employees will hold 48.75% of the Valepar capital, while the remaining 51.25% will be held by CSN and the other companies that make up the "Consórcio Brasil".
- The second stage of CVRD’s privatization involves the offering of stocks to the employees, who will be entitled to purchase up to 5.1% of the company’s total capital, which includes 4.45% of the common stocks and 6.3% of the preferred capital stocks. To conclude the process, a public offering of 26.5% to 31.5% of the common stock (equivalent to 17 to 20% of the total capital) will be held in Brazil and abroad.