OREANDA-NEWS. June 7, 2011. The up to BRL  1.3 billion capitalization sought by MPX was approved this week by BNDESPAR, Gavea Investimentos and company controlling shareholder Eike Batista. The operation will be accomplished out by an issue of debentures convertible into MPX common shares, for conversion within 3 years, at the exercise price of  BRL  43 per share. Last Wednesday, June1st, MPX stock price closed the trading day at BRL  41.75. BNDES intends to invest BRL  600 million through BNDESPAR.  Through one of its funds, Gavea Investimentos and MPX majority shareholder Eike Batista will contribute, each, with BRL  200 million. MPX minority shareholders will have the right granted to the three investors to join the operation, adding approximately BRL  369 million to the capitalization.

MPX will make a private issue of 21.7 million debentures convertible into common shares, at the unite price of BRL  63.  These securities will yield compensation corresponding to the IPCA plus 4% spread per year. Once the transaction is completed, BNDESPAR and Gavea Investimentos will, each, be entitled to appoint a member of MPX Board of Directors.  To Mr.  Eike Batista, Chairman of the Board of Directors and MPX controlling shareholder, “sanction by BNDES, after a long and detailed period of transaction analysis by the bank, evidenced that we were capable of engineering an outstanding way of capitalizing MPX that has now reached a unique moment in company history”.

On its turn, resources administrator Gavea founder and CEO, Mr. Arminio Fraga, reported to be extremely happy to join BNDES for this operation that has sound financial, economic and market foundation structure.  “ Because of this capitalization, MPX, a company committed to the highest corporate governance standards, and evidencing  strong cash generation expectations for this year, will have assured the continuity of its promising expansion plans, Arminio Fraga said.

In the next few days Company management will be issuing a call for a General Extraordinary Meeting to decide on the terms and conditions of this operation. Capitalization resources  will be used towards the development of MPX key projects, such as natural gas exploration in the Parnaiba Basin,  natural gas, coal and solar  power generation ventures, adding up to 11 GW installed capacity, and the integrated mining system in  Colombia.

In the last three years MPX has already invested over BRL  4.3 billion in the construction of three coal-fired plants in  Ceara and in  Maranhao, totaling 1440 MW installed capacity.  At peak time of the works that are scheduled for completion by 2012, 10 thousand jobs were generated by company ventures. Meanwhile, at the Parnaiba Basin, where MPX  and OGX are partners in seven onshore blocks, about 1000 people are working for OGX Maranhao, engaged in exploration and seismic activities.  As the construction of the natural gas-burning thermoelectric plants starts, more than 1000 job opportunities will be generated, with priority given to local labor. In order to make this target feasible, a qualification program was launched by MPX, in May, from which 500 people will benefit.