Brazil’s development bank BNDES readies sale of Vale debentures

By Carolina Mandl SAO PAULO, Oct 7 (Reuters) – Brazilian development bank BNDES expects to conclude the sale of roughly 2 billion reais ($356 million) in local Vale SA VALE3.SA bonds it holds by the beginning of next year, a bank executive said on Wednesday. In September, BNDES said it […]

By Carolina Mandl

SAO PAULO, Oct 7 (Reuters)Brazilian development bank BNDES expects to conclude the sale of roughly 2 billion reais ($356 million) in local Vale SA VALE3.SA bonds it holds by the beginning of next year, a bank executive said on Wednesday.

In September, BNDES said it had hired banks to manage the offering, as part of its strategy to unload securities held by its investment arm and focus mainly on small companies and infrastructure.

Brazil’s government will also join BNDESPar, the bank’s investment arm, in the sale of Vale’s so-called “debentures participativas”, in an offering that may reach 6 billion reais, managing director for privatizations Leonardo Cabral said in an interview.

The bank has sold off 42 billion reais in company shares so far in 2020. BNDES raised 6.91 billion reais last week with the sale of its stake in pulp and paper maker Suzano SA SUZB3.SA. The bank posted a gain of roughly 2 billion reais by selling the shares, which it had held for decades.

Earlier this year, BNDES also sold shares in Vale and in state-controlled oil company Petrobras SA PETR4.SA.

Cabral said the bank is monitoring investors’ appetite to sell additional stakes it has in both Petrobras and Vale, but he added there is no clear time frame to do so.

BNDES’s goal is to divest 90 billion reais from its securities portfolio by the end of 2022 – half of which it has sold so far.

Some portfolio companies may take longer to be sold, he added. The bank is asking other investors in JSB SA JBSS3.SA to support a class action suit against the meatpacker’s executives and controlling shareholders seeking compensation for damages caused by a bribery scheme.

Shareholders will decide if they will support BNDES in a shareholder meeting scheduled for Oct. 30.

BNDES will not sell its stake in the company before reaping the potential gains from the action, Cabral said.

($1 = 5.6122 reais)

(Reporting by Carolina Mandl; editing by Richard Pullin)

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