Response to OFFICIAL LETTER/CVM/SEP/GEA-2 N. 204/2013
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Rio de Janeiro, 11 de julho de 2013. 
 
To
CVM – Comissão de Valores Mobiliários (Brazilian Securities and Exchange Commission)
Att.: Mr. Fernando Soares Vieira
Superintendence of Corporate Relations
Att.: Mr. Daniel Alves Araújo de Souza
Company Monitoring Management
 
c.c.
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Att.: Mr. Nelson Barroso Ortega
Issuers Monitoring Management
 
Re.: Response to OFFICIAL LETTER/CVM/SEP/GEA-2 N. 204/2013
 
 
Dear Sirs,
 
We refer to Official Letter transcribed below, by means of which you requested clarifications from MMX Mineração e Metálicos S.A., (“Company”), as regards the content of the news article published on the website www.terra.com.br (Economy section), 07/10/2013 edition, at 09:36 a.m.
 
“OFFICIAL LETTER/CVM/SEP/GEA-2/N. 204/2013                   
To Mr.
Carlos Gonzalez
Investor Relations Officer of
MMX Mineração e Metálicos S.A.
Praça Mahatma Gandhi 14, 6th floor  - Centro
20031-100 - Rio de Janeiro – RJ
Tel.: (21) 2163-5557 Fax: (21) 2163-4011
E-mail: ri@mmx.com.br; gre@bvmf.com.br; nortega@bvmf.com.br;
 
Subject:  Request for Clarification
 
Mr. Executive Officer,
We refer to the Notice to the Market published on 03.26.2012 under the headline “Mubadala invests US$ 2 billion in the EBX Group as part of the strategic partnership with Eike Batista”, to the press release issued on the date hereof, as well as to the following news article published on the website www.terra.com.br (Economy section), at 09:36 a.m., on the date hereof:
 
 
The EBX Group, controlled by entrepreneur Eike Batista, announced Wednesday that it successfully concluded the restructuring of the terms and conditions of the agreement entered into in April 2012 with Mubadala Development Company, an Abu Dhabi sovereign wealth fund, according to information disclosed by its press department. "The new agreement further reinforces the stability of the EBX Group" ,the statement says.
 
In practice, according to information published in early July by the Reuters news agency, the restructuring provides that the Mubadala fund will be the sole creditor of the entrepreneur’s holding upon completion of the process of selling assets and seeking strategic partners for the "X" companies, which should take months.
 
According to the statement, "in the context of the new agreement, EBX repaid a significant portion of Mubadala’s initial investment." "EBX and Mubadala also successfully completed supplementary agreements that ensured greater protection for the remaining portion of Mubadala’s investment. EBX and Mubadala will remain engaged in discussions regarding the final stages of EBX’s restructuring, as well as with regard to the full development of the business of the companies that comprise the EBX Group, said the statement.
 
According to an anonymous source heard by Reuters, the restructuring resulted in reduction of the approximately US$ 2 billion (R$4.5 billion) debt to between US$ 1.6 billion and US$ 1.7 billion.
 
In addition, the maturity of the debt was extended. Part of the debt with Mubadala was supposedly paid with funds raised by Eike with the sale of shares of OGX in late May. The entrepreneur also delivered shares of mining company MMX to the fund, as well as personal investment in fast-food chain Burger King, said the source.
 
Eike, who in 2012 was on the list of the world’s 10 richest men, saw his fortune collapse from tens of billions of dollars to a few billion this year. He was a victim of his ambitious projects that failed to deliver the promised results - mostly in the infrastructure and energy sectors. Faced with the collapse in market value of EBX’s subsidiaries in Bovespa in recent months, in March Eike hired BTG Pactual as financial advisor to find alternatives for the group.
 
“In the end, the holding will have a long-term debt with Mubadala and no other debts. And it will have some cash, secondary assets and a diluted stake in logistics company LLX, because new investors will be brought in who will complete the port (LLX)”, the source said.
 
With respect thereto, we require that you: (i) clarify the details of the mentioned restructuring as well as the impacts thereof on this publicly-traded company; (ii) explain the reasons why such matter was not deemed to be a Material Fact and (iii) obtain from the controlling shareholder a statement as to why he did not cause the mentioned restructuring to be disclosed by the publicly-held companies, in line with the procedure adopted on 03/26/2012, further clarifying the reasons why the controlling shareholder believes that “the new agreement further reinforces the stability of the EBX Group”.
 
Such response shall contain a copy of this official letter and shall be entered into the IPE System, under the category Notice to the Market, type Clarifications on CVM/BOVESPA Queries.
 
We remind you that in accordance with the sole paragraph of article 4 of CVM Rule 358/02, the Investor Relations Officer shall question the people with access to material acts or facts, in order to verify whether there is any information that was not properly disclosed to the market.
 
We inform you that the Superintendence of Corporate Relations, in compliance with its legal duties and based on item II of article 9 of CVM Rule 452/07, is responsible for determining the imposition of a punitive fine, in the amount of R$ 1,000.00 (one thousand reais), without prejudice to other administrative penalties, for failure to comply with this official letter, which has concurrently been sent by e-mail, within 24 hours.
 
Sincerely,
Daniel Alves Araújo de Souza
Manager of Company Monitoring 2
Fernando Soares Vieira
Superintendent of Corporate Relations”
 
The Company again clarifies that it is not a party, directly or indirectly, to the agreements entered into between the Company’s controlling shareholder, Mr. Eike Fuhrken Batista, and Mubadala Development Company.
 
Therefore, the transaction in question in no way affects the Company and its corporate interests, and does not in itself have the ability to cause any change in the control, development, or management of its activities.
 
Finally, the Company informs that, at CVM’s request, it has received the following information from the Company’s controlling shareholder:
 
“The restructuring of my agreement with Mubadala, one of the world’s largest and most respected sovereign wealth funds, provides even greater stability to holding company EBX, as it shows confidence on the part of an investor that is of great prominence in the financial community in my holding’s ability to move forward with its ongoing search for an increasingly robust capital structure that is able to fully meet its best corporate interests”.
 
 
With assurances of highest consideration, we remain at your disposal for any further clarification.
 
Sincerely,
 
Carlos Gonzalez
CEO and Investor Relations Officer
MMX Mineração e Metálicos S.A.
 
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