SAO PAULO (Reuters) - Mubadala Development Co PJSC [MUDEV.UL] is in talks to buy a minority stake in Invepar SA (IVPR4B.SO) and inject fresh capital into the Brazilian infrastructure company to kick-start projects and reduce debt, three people with direct knowledge of the matter said on Thursday.
According to two of the people, Abu Dhabi-based Mubadala is in advanced talks to buy 24.4 percent of the company from a group of investment firms that obtained it in the in-court reorganization of OAS SA, one of Invepar’s founding partners. OAS [OAEP.UL] surrendered the Invepar stake late last month.
A deal, which could be announced around late February or early March, would trigger a reworking of the shareholder accord between OAS and the three Brazilian pension funds that own a combined 75.6 percent of Invepar, said the people, who requested anonymity as talks remain under way.
As part of the plan, Mubadala would agree to pump fresh capital into Invepar to rework that accord, the people said. The capital injection would dilute the stakes that Previ Caixa de Previdência [PREVI.UL], Petros Fundação Petrobras [PETROS.UL] and Funcef Fundação [FUNCEF.UL] have in Invepar, two of the people said.
In a statement to Reuters, Mubadala said it is “always looking for opportunities in sectors and geographies with strong potential.”
OAS and representatives for the creditor group declined to comment.
Previ declined to comment, while Petros and Funcef did not have an immediate response.
The deal underscores growing interest in infrastructure firms among global private equity firms and sovereign wealth funds, which want to take advantage of depressed valuations to plant flags in Brazil ahead of an expected economic recovery.
Mubadala first ventured into Brazil in 2012 through a partnership with former tycoon Eike Batista, from whom it bought a stake and extended a loan to his mining, energy and logistics conglomerate Grupo EBX.
The collapse of EBX left Mubadala with stakes in several EBX-controlled companies, property and a $300 million stake that he held in Burger King Holdings Inc [BKWXK.UL].
Formally known as Investimentos & Participacoes em Infraestrutura SA, Invepar operates toll road, airport and urban mobility licenses, including São Paulo’s GRU international airport and the MetrôRio and VLT Carioca urban transport projects in Rio de Janeiro.
The company had previously been the target of interest from global firms including Canada’s Brookfield Asset Management Inc (BAMa.TO) and France’s Vinci SA (SGEF.PA), Reuters reported in June 2015. Brookfield scrapped plans to acquire the stake from OAS and creditors over strategic disagreements.
A new partner would help Invepar cut debt and jumpstart investments that snagged amid Brazil’s harshest recession ever, surging borrowing costs and the involvement of OAS in the nation’s worst corruption scandal.
The creditor group could sell the stake for a value “north of” 2 billion reais ($642 million), the people said. The creditors took control of the stake in exchange for their redemption of 1.25 billion reais worth of OAS debt.
($1 = 3.1174 reais)
Additional reporting by Stanley Carvalho in Abu Dhabi; Editing by Phil Berlowitz