Fight for Eldorado raises claims of partners

The holding company of the family Baptist is already working in the application, "on grounds of non-fulfilment of the contract by the EP and the behavior for her adopted down here," said. Still no value set, the found Value. The PE, for your time, said it will take into account in their calculations spent with the "postponement of business", image damage and losses arising from the maintenance of control actions with the J&F, including lost profits ". According to sources with knowledge of the subject, the desired cipher by J&F may be a billionaire, proportional to the size of the operation. The value of the company assigned to the Eldorado in business was R $15 billion. The EP has already disbursed R $3.8 billion for a controlling stake of 49.41% in the company and for the slice of 50.59% that still belongs to the holding of the Baptist, would pay other R $4.4 billion. The claims represent another chapter of the dispute between the members and shall be submitted to arbitration. The Paper Excellence has already initiated the procedure, to indicate the arbiter of your choice. The J&F, for your time, is evaluating names and shall direct your decision in the next few days, found the value. In arbitration, according to sources, the Paper Excellence will argue that the holding of the Baptist blocked the sale of control of Eldorado, to hinder the fulfillment of conditions precedent in search of a higher price to the previously set. To justice, the EP said in a meeting in Los Angeles (USA), which participated in the owner of the company, Jackson Wijaya, the J&F asked for an additional R $6 billion (in addition to the R $4.4 billion) for the business, which was refused. The version of J&F, which denies having made such request, is different. As the holding company, the conversations about how much would it be today the Eldorado appeared in date with Wijaya after the parties failed to reach an agreement on how to guarantees provided by holding in the company's debt would be released, at the request of the EP itself in Exchange for more term. After the judicialization of the conflict, the Baptist would have closed a potential agreement and would not take over the manufacturer of cellulose as an asset for sale. The release of these guarantees – guarantees and JBS's shares worth some R $8 billion – was a precondition for the purchase and control has not been achieved within the period laid down, 12 months after the signature of the contract. The parties also differ as to the reasons for non-compliance with this condition. The PE claims that different models have been proposed to release the guarantees, poisoned by J&F. Already holding indicates that, after failing in an attempt to exchange the guarantees and prepayment clause in front of exchange control, the EP insisted on a that model would be the only possible. The company proposed the payment of debts from Eldorado with resources for her transferred through advance for future capital increase and a loan in the form of pre-payment of exports (EPP). Before the end of the contractual period, the EUROPEAN PARLIAMENT appealed to justice to ensure that this structure, rejected by the J&F under the justification that there is no contractual forecast and jeopardize your shareholder position in the company, was implemented. The injunction request was not accepted. For Justice, the model proposed by the EP, which was the CA Investment in Brazil to carry out the operation, changes the financial equation and given set between the parts and modifies the contract, extrapolating the limits of cooperation. Justice, however, prevented the J&F to sell their shares in the Eldorado and established that the administration of pulp producer cannot be modified. If there is an agreement to shorten time limits, a decision of the arbitral tribunal may take two years to three years. The last possibility of rapid resolution of the dispute was by land last week, when the TJ-SP agreed with the judge of first instance and dismissed the application for injunction. On the two rulings unfavorable to EP and the placement of judgments, the assessment in J&F, according to sources, is that the main discussion on arbitration shall be on the damages. Sought, the J&F said it "deplores the attitude of the EUROPEAN PARLIAMENT and, for the benefit of Eldorado, will seek to maintain the best possible relationship with minority partner". The PE, for your time, said in a note to be optimistic about a favorable outcome in arbitration and reiterated that R $11.4 billion in own resources remain available for completion of the purchase from Eldorado. The paper and pulp sector follows closely the developments of the dispute because it has potential impact on growth of the installed capacity. The Eldorado has expansion project that tends to be affected by the dispute between their members. The value that the J&F does not evaluate the project, which will require investments of R $10 billion. Over the next two years, there is no ETA of new pulp capacities to the market, which has motivated a sort of race between producers to announce a new factory before the competition. As the Eldorado already has the basic engineering of the project, and there are wood available in Mato Grosso do Sul, the company would be a strong candidate for the next expansion of the sector.