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Qatar said to be close to acquiring stake in Batista AUX Unit

Eike Batista, Brazil’s richest man, plans to announce as soon as this month the sale of a 49 percent stake in his AUX gold business to Qatar for about $2 billion, a source with direct knowledge of the negotiations said.

The announcement will probably come at the end of this month or early in November, according to the source, who asked not to be identified because the matter was private. Qatar Mining Co. may make the acquisition, though the government is also considering using its sovereign fund, the Qatar Investment Authority, the source added.

EBX Group Co., Batista’s Rio de Janeiro-based holding firm, decided to sell a stake in AUX, which mines for gold in Colombia, after shelving plans to take the company public. Batista told reporters on June 21 that he had sold 49 percent of the business, without disclosing the buyer or the price. He said the acquirer wasn’t a gold company.

Batista, 55, said last year that AUX was worth $5 billion after purchasing Vancouver-based Ventana Gold Corp. in March 2011 for C$1.08 billion ($1.1 billion). The company has 11 million ounces of gold, he said on May 22. AUX’s La Bodega mine, located about 400 kilometers northeast of Bogota, also has copper and silver deposits.

An EBX official in Rio who asked not to be identified said EBX doesn’t comment on market rumors

A Qatari official in Doha, who also asked not to be identified, declined to comment on EBX talks.

“We are studying it,” Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani said in an interview with CNBC television last week. “There is no commitment from our side, but this is one of the things our people are studying. It still needs to come to the board to see the details of it.”

Batista’s net worth has dropped 7.1 percent this year to $20.9 billion, making him the 28th-richest person in the world, according to the Bloomberg Billionaires Index, a daily ranking of the wealthiest individuals.

Declining share prices for some of his companies and the tougher outlook for emerging markets are making Batista adjust his priorities, Joao Augusto de Castro Neves, an analyst at Eurasia Group in Washington, said in a telephone interview.

“He is trying to display a strategy for a less-favorable global moment,” Neves said. “This is the reaction of a businessman to quite an unfavorable moment for the global economy.”

Qatar Holding LLC, the investment arm of the country’s sovereign wealth fund, released a statement on Sept. 26 denying “speculation in international media” that it was near an agreement to buy a minority stake in AUX.

 
A version of this article appeared in the print edition of The Daily Star on October 06, 2012, on page 4.

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