Mubadala takes ownership of Hotel Gloria in Brazil
Mubadala takes control of Brazil tycoon's hotel, other assets
DUBAI, January 21, 2016
Mubadala Development, an Abu Dhabi-based investment and development company has taken ownership of Brazil’s first five-star hotel as well as stakes in four companies belonging to Brazilian tycoon Eike Batista.
Mubadala had loaned $2 billion to Batista in 2012 but following a financial meltdown by Batista’s industrial group, he was forced to repay the debt with assets.
Once Brazil's richest man, Batista has been hard hit by the crash in the country's decade-long commodities boom which led to the collapse of his EBX mining, energy, shipbuilding, port operation and transportation group.
In effort to repay debts, Batista has agreed to turn over 100 per cent of his ownership in the historic Hotel Gloria to the Gulf company.
Opened in 1922, the historic hotel was bought by Batista in 2008 for around $50 million and was set to be restored ahead of the 2014 World Cup and 2016 Summer Olympic Games. However, restoration work was halted as Batista’s business empire began to falter.
Mubadala has also taken stakes in four companies Batista has created as part of an agreement with the Gulf investment fund.
Documents posted on the websites of the four companies show Mubadala will take a 28.79 per cent stake in shipbuilder OSX Brasil through its affiliate, and a 21.04 percent stake in mining company MMX Mineração e Metálicos.
It will also take a 26.45 per cent stake in coal firm CCX Carvão da Colômbia and an 11.47 per cent holding in the oil firm formerly known as OGX Brasil.
Mubadala bought a 5.63 per cent stake in EBX in 2012, before EBX collapsed. Under the terms of the deal, Batista was required to give Mubadala part of his holdings and more collateral if the investment didn't return at least 5 per cent a year.
The transaction between Mubadala and EBX was ultimately structured as a $2 billion loan.
In a statement, Mubadala said the restructuring of its 2012 investment was ongoing.
The latest asset transfers follow other agreements to shift stakes to Mubadala, including in 2014 a 10.44 per cent stake in port operator Prumo Logistica. - Reuters
