Brazil's MMX Gains Approval To Make Offer For PortX Shares

RIO DE JANEIRO -(Dow Jones)- Brazilian iron ore miner MMX Mineracao e Metalicos SA (MMXM3.BR) said Monday it has permission from Brazil's securities commission CVM to make a public exchange offer for shares of PortX Operacoes Portuarias SA (PRTX3.BR), a sister company with the EBX Group controlled by Brazilian billionaire Eike Batista.



MMX will publish within 10 days a prospectus with details of its planned offer for PortX, the operating company of iron ore export port Superporto Sudeste, which is currently under construction in Rio de Janeiro state, MMX said in a statement.



PortX's existing shareholders, which include Batista, will receive a total of $1.8 billion in royalties-based payments, in addition to around $440 million that will be payable in cash or in MMX shares, under the terms of the offer, MMX said. PortX shareholders will have 30 days in which to agree to the offer.



MMX plans to acquire Sudeste port in order to create a fully integrated system of mines and ports. Last September, South Korea's SK Networks Co (001740.SE) acquired 85.49 million new ordinary shares in MMX for 1.19 billion Brazilian reais. SK will own 11% of Sudeste port as part of its accord with MMX, the company reported at the time. MMX will supply SK with iron ore under a long-term contract as part of the accord between the two companies, MMX said.



Deepwater Sudeste port will initially have the capacity to ship 50 million metric tons a year of iron ore when it starts operations in 2012 in a $1.8 billion investment. It may eventually be expanded to a capacity of 100 million tons a year, to ship iron ore produced both by MMX and other mining companies in the region, MMX Chief Executive Officer Roger Downey said recently.