June 12, 2018 / 6:19 PM / 6 months ago

UPDATE 1-Brazil pension fund Petros expects to sell part of Vale stake in 2018-CEO

(Updates with Vale shareholder Petros comments)

By Carolina Mandl

RIO DE JANEIRO, June 12 (Reuters) - Brazilian pension fund Petros expects to sell part of its stake in mining company Vale SA this year, Chief Executive Officer Walter Mendes said on Tuesday, an indication that Vale’s main shareholders may sell their stakes separately.

Speaking to journalists on the sidelines of a pension fund conference in Rio de Janeiro, Mendes said Petros wants to sell part of its stake in Vale this year, but does not want to “rush” nor divest completely from the world’s top iron ore miner.

Petros, which manages the pensions of workers at Petroleo Brasileiro SA, last year reached a deal under which the state-controlled oil company and its employees agreed to boost contributions to the fund to tackle a 27.7 billion reais ($7.5 billion) actuarial deficit.

Funcef, another Vale shareholder that manages pensions for employees of the state-owned lender Caixa Economica Federal, said earlier on Tuesday it has not yet decided whether to sell its stake.

Funcef director Paulo Werneck, at the same conference in Rio, said the fund sees no immediate urgency to sell its Vale stake. It has enough liquidity to cover retirement payments over the next two years, he said, adding: “We don’t need a fire sale”.

Since Vale unified its outstanding stock into a single class of shares last year, controlling shareholders such as pension funds Previ and Funcef, holding company Bradespar SA and Mitsui & Co Ltd are allowed to gradually sell their stakes.

The first lock-up period ended in February, allowing partial sale of the stakes. Vale’s corporate reorganization approved last year aims to turn the miner into a company with dispersed share ownership in the next decade.

Funcef is also considering which stocks pay larger dividends when choosing stocks from its portfolio to sell, Werneck said. Vale said publicly it intends to hand out $1 billion in dividends each quarter this year.

The sale of Vale stakes has been a subject of market speculation since the move to a single class of stock. Pension funds have been considering selling 10 to 12.5 percent of their stakes in Vale together.

But Reuters reported in April that Previ, the largest Vale pension fund shareholder, which manages pensions of workers at state-controlled Banco do Brasil SA, is not likely to sell its shares in 2018.

Vale shares were up 1.6 percent at 51.66 reais per share. They are up 30 percent year-to-date. ($1 = 3.6930 reais) (Reporting by Carolina Mandl; writing by Tatiana Bautzer, editing by Bill Berkrot)

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