Saturday, Feb 16, 2013
(This article was first published on Friday)
By Luciana Magalhaes
SAO PAULO--Unfavorable global conditions have led to a delay in the sale of a 49% stake in Brazil's AUX gold business, controlled by billionaire Eike Batista, to Qatar for $2 billion, according to a person with knowledge of the situation.
Negotiations for AUX, which mines gold in Colombia, started in the second half of 2012, after Mr. Batista gave up plans to take the company public, but talks stalled in December, the person said, adding that interest in a deal hasn't been abandoned.
"The willingness to go ahead still exists," the person said.
Talks were initially conducted between EBX and Qatar Mining Co. and then sent for final evaluation to Qatar Holding LLC, the investment house founded by the Qatar Investment Authority, which hasn't yet given its final word on the matter, according to the same person.
Emir H. H. Sheikh Hamad bin Khalifa Al Thani began a tour of South American countries this week, but he wasn't expected to meet with Mr. Batista, the person said.
Last year, Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr Al-Thani confirmed in an interview with CNBC television that the deal was under analysis. "There is no commitment from our side, but this is one of the things our people are studying," he said.
Both Qatar Holding and EBX declined to comment for this article.
"Difficulties faced by the [EBX] group might also have contributed to delay the deal, but I don't think they would prevent the deal from happening," said Joao Pedro Brugger, an analyst at Brazil's brokerage Leme Investimentos.
While looking to sell a stake in AUX, Mr. Batista is also seeking to delist Carvao da Colombia SA (CCXC3.BR), which has been developing coal mining projects in Colombia.
In January, the Brazilian businessman made public an offer to acquire the company's outstanding shares, only a year after taking it public. Mr. Batista noted CCX ran into problems due a deterioration in the outlook for the coal market.
Companies controlled by Mr. Batista have been suffering since last June, when OGX Petroleo e Gas Participacoes SA (OGXP3.BR), reported production figures for its first oil well that were below market expectations.
The fall in shares of his companies, many still in pre-operational stages, led Mr. Batista to lose his title of Brazil's richest man to Brazilian financier Jorge Paulo Lemann, whose 3G Capital this week paired with U.S. billionaire Warren Buffett to buy ketchup maker H.J. Heinz Co. (HNZ).
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com
(END) Dow Jones Newswires
16-02-13 0629GMT
