Latin Finance - July/August 2009 - 21

eike batista EBX Pushes Infrastructure by Dan Shirai ike Batista, the Brazilian entrepreneur, says he is moving ahead full steam with plans to create an infrastructure-focused private equity fund worth up to $10 billion. “We want to establish this fund to invest in the projects tied to the companies of [Batista holding company] EBX,” he tells LatinFinance in an exclusive interview. This would imply a focus on logistics, mining, oil and gas, and power generation. “MPX could execute many more projects if it had access to more funding,” Batista adds, referring to his power generation unit, which went public in December 2007. The Equity Growth Fund, as it will be called, already counts on the support of China Investment Corporation, a sovereign wealth fund, as well as Brazil’s Banco Itaú, says the executive. Batista says pension funds in North America and Europe, and other sovereign wealth funds, could make up the bulk of his PE vehicle’s remaining limited partners. “Things are so bad that many investors today are settling for returns of 3%-4%,” says the billionaire. “But in Brazil you have projects that can yield 10%-15% on a non-leveraged basis,” he adds. Batista says that the investment rationale for the fund, its structure and target returns are still being finalized. A typical “2 and 20” fee structure or similar might be employed, says the executive, referring to the practice of charging a management fee of 2% on net asset value and 20% fee on profit. EBX executives hired especially for the job will manage the fund. Batista says he has already tapped four directors, but declines to specify names. Among them are Otávio Lazcano, former CFO of CSN who left his São Paulo-based post earlier this month, and former Terna executive Giovanni Giovanelli. E Eike Batista is rolling out a jumbo infrastructure-focused private equity fund to support his businesses. A major new Brazilian shipping hub is also in the works. partnership whereby only one operator would acquire a minority stake in BEX and contribute operations and know-how. “Brazil needs to get away from this habit of building one specific kind of platform for each [type of oil exploration],” says Batista. He adds that the goal is to create a kind of assembly line that can bulk produce standard model vessels to be used by Petrobras, OGX and eventually other international clients. Petrobras CEO José Gabrielli told investors in New York in May that standardizing equipment production is among the oil giant’s priorities for saving costs, as it seeks to execute a $174 billion investment plan. “OGX’s demand for [offshore drilling] equipment alone will total some $20 billion over the next several years,” says Batista. The executive adds that BEX will likely be among the main underpinnings of the Equity Growth Fund. Proper licensing for the shipyard, however, may take a good part of a year, says Batista. And construction of this kind of facility could take an additional 4-5 years, adds an EBX official. Last and for now likely least, Batista says he is cooking up a new internet company that is likely to be an IPO once its site achieves certain traffic metrics. The company is based on the work of Eike’s younger brother Lars Batista, an accomplished videogame developer and the founder of a company called Cinemaware. The new company’s Web site would draw users interested in mostly videogames and software, as well as networking and e-commerce. The company would be headquartered in Brazil, says Batista, despite Cinemaware’s former headquarters in California. LF Seizing opportunity: Batista plots new shipyard New Shipping Hub Elsewhere, Batista is gearing up to build and operate Brasil Estaleiros (BEX), which he claims will be Brazil’s first major shipyard specializing in standardized oil and gas exploration vessels. The facility, whose construction is expected to command an investment of $500-$600 million, is set to be built on a 1.6 million square meter stretch of coastline called Biguaçu in the southern Brazilian state of Santa Catarina, says Batista. Some 80% of the financing for the project will come from the BNDES, with the balance in the form of equity from eventual BEX shareholders, which would include the Batista’s holding company EBX. As of mid-June, Batista was in discussions with three Singaporean and three Korean shipbuilders about a July/August 2009 LatinFinance 21

Latin Finance - July/August 2009

Table of Contents for the Digital Edition of Latin Finance - July/August 2009

Latin Finance - July/August 2009
Contents
Fund Performance
Compensation Survey
Sellside Startups
Eike Batista Interview
Private Equity
Private Banking
BNDES Lending Analysis
Equador Mining
Corporate Governance
Parting Shot
Latin Finance - July/August 2009 - Latin Finance - July/August 2009
Latin Finance - July/August 2009 - Cover2
Latin Finance - July/August 2009 - Contents
Latin Finance - July/August 2009 - 2
Latin Finance - July/August 2009 - 3
Latin Finance - July/August 2009 - 4
Latin Finance - July/August 2009 - 5
Latin Finance - July/August 2009 - 6
Latin Finance - July/August 2009 - 7
Latin Finance - July/August 2009 - 8
Latin Finance - July/August 2009 - 9
Latin Finance - July/August 2009 - Fund Performance
Latin Finance - July/August 2009 - 11
Latin Finance - July/August 2009 - 12
Latin Finance - July/August 2009 - 13
Latin Finance - July/August 2009 - 14
Latin Finance - July/August 2009 - 15
Latin Finance - July/August 2009 - Compensation Survey
Latin Finance - July/August 2009 - 17
Latin Finance - July/August 2009 - 18
Latin Finance - July/August 2009 - Sellside Startups
Latin Finance - July/August 2009 - 20
Latin Finance - July/August 2009 - Eike Batista Interview
Latin Finance - July/August 2009 - Private Equity
Latin Finance - July/August 2009 - 23
Latin Finance - July/August 2009 - Private Banking
Latin Finance - July/August 2009 - 25
Latin Finance - July/August 2009 - BNDES Lending Analysis
Latin Finance - July/August 2009 - 27
Latin Finance - July/August 2009 - 28
Latin Finance - July/August 2009 - 29
Latin Finance - July/August 2009 - Equador Mining
Latin Finance - July/August 2009 - 31
Latin Finance - July/August 2009 - 32
Latin Finance - July/August 2009 - 33
Latin Finance - July/August 2009 - Corporate Governance
Latin Finance - July/August 2009 - 35
Latin Finance - July/August 2009 - 36
Latin Finance - July/August 2009 - 37
Latin Finance - July/August 2009 - 38
Latin Finance - July/August 2009 - 39
Latin Finance - July/August 2009 - 40
Latin Finance - July/August 2009 - 41
Latin Finance - July/August 2009 - 42
Latin Finance - July/August 2009 - 43
Latin Finance - July/August 2009 - 44
Latin Finance - July/August 2009 - 45
Latin Finance - July/August 2009 - 46
Latin Finance - July/August 2009 - 47
Latin Finance - July/August 2009 - Parting Shot
Latin Finance - July/August 2009 - Cover3
Latin Finance - July/August 2009 - Cover4
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