MMX approves corporate reorganization of MMX Minas-Rio System.
The Board of Directors of MMX approved today the corporate reorganization (the "Reorganization") involving assets of MMX Minas-Rio Minera[?]ao e Logistica Ltda. ("MMX Minas-Rio"), a company owned as to 70% of its shares by MMX, with the remainder of its shares owned by Centennial Asset Participa[?][?]es Minas-Rio S.A.
The Reorganization will contemplate the transfer or spin-off (cisao) of certain assets and liabilities of MMX Minas-Rio to two newly-formed companies, LLX Minas-Rio Logistica Ltda. ("LLX Minas-Rio") and LLX Porto do A[?]u Ltda. ("LLX A[?]u"). As a result of the Reorganization, LLX Minas-Rio will own the logistics assets of the MMX Minas-Rio integrated system (the "Minas-Rio System"), namely its slurry pipeline and a 300-hectare iron ore port facility at the Port of A[?]u. LLX A[?]u will own the remaining port area, consisting of approximately 5,700 hectares of coastal land. MMX Minas-Rio and its subsidiaries will continue to own the Minas-Rio System mining rights, iron ore beneficiation plant and the right of way for the slurry plipeline.
After the Reorganization, the Minas-Rio System will be developed jointly and in an integrated fashion by MMX Minas-Rio and LLX Minas-Rio, each of which will be responsible for the project's capital expenditures related to its respective assets. The Minas-Rio System revenues will be allocated between MMX Minas-Rio and LLX Minas-Rio in accordance with the nature of each company's businesses and proportionate to their respective contribution to the project's capital expenditures. The allocation of revenues will be determined on an arm's length basis and will be established in the context of the negotiation with the Mias-Rio System strategic partner that will eventually purchase Centennial Asset Mining Fund LLC's 30% equity interest in MMX Minas-Rio and LLX Minas-Rio.
LLX A[?]u will concentrate its business efforts in developing a third party logistics business and attracting industrial projects for the Port of A[?]u 5,700-hectare area. The Port of A[?]u, which already has a preliminary environmental license from FEEMA (the Rio de Janeiro State environmental agency), has been designed with a 21 meter draft that can harbor oceangoing vessels with capacities of up to 250,000 dead weight tons. The existing environmental license allows for an expansion of the capacity of the Port of A[?]u up to 200 million tons of cargo per annum.
At the end of the Reorganization, which will not represent any dilution to MMX's interests, MMX will transfer its equity participation in LLX Minas-Rio and LLX A[?]u to LLX Logistica S.A. ("LLX"), the new holding company for MMX's logistics division. LLX, in addition to coordinating the business of its future subsidiaries, will continue to pursue business opportunities in the logistics industry for MMX and to service third parties and will function as an independent business unit.
To achieve its strategy, LLX is seeking to finance its activities by means of debt facilities with financial institutions or a private placement of LLX shares, initially to strategic or financial partners interested in the development of its logistics activities.
LLX will have independent management and the Board of Directors of MMX has nominated Mr. Ricardo Antunes as Chief Executive Officer of LLX and Mrs. Eliane Lustosa as Chief Financial Officer.
Mr. Antunes is currently MMX's Commercial Director, a position he will hold for a limited period of time while MMX nominates a replacement.
Eike Batista, MMX's Chairman & Chief Executive Officer stated "LLX will provide MMX with a unique opportunity to unlock the value of its logistics assets. We are in negotiations with potential strategic partners that have identified in LLX a significant potential to develop Brazil's lagging logistics and infrastructure industries, which represent today one of the country's largest growth bottlenecks".
For additional information, please contact MMX at email@example.com.
Rio de Janeiro, March 22, 2007 MMX MINERACAO E METALICOS S.A. Luiz Rodolfo Landim Machado Executive President and Investor Relations Officer
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|Date:||Mar 23, 2007|
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