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E.ON to up stake in Brazilian magnate Eike Batista's MPX Energia

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(Globalpost/GlobalPost)

Sao Paulo, Mar 29 (EFE).- German electric utility E.ON has announced it will boost its stake in MPX Energia, the power generation unit of Brazilian magnate Eike Batista's EBX conglomerate.

Germany's biggest power supplier said it will initially invest roughly 1.5 billion reais (some $746 million) to raise its stake in the company from 11.7 percent to 36.2 percent.

It also pledged to participate in a share offering to be undertaken by MPX later this year.

Analysts said Thursday's announcement is a good sign for Eike Batista's company.

Ricardo Torres, a professor at the BBS Business School in Sao Paulo, told Efe that the deal will not only provide MPX with a capital injection but also boost its credibility.

Brazil's BNDES state development bank also hailed the announcement, saying it will allow MPX to "raise new funds," execute its investment plans and increase market share in the South American giant's electricity sector.

E.ON's plans to boost its stake were announced at a time of uncertainty for Batista's business empire.

The magnate, Brazil's richest person just a year ago, has seen his net worth fall due to a drop in the share prices of his publicly traded companies, including MPX.

He ranked No. 100 on Forbes magazine's latest list of the world's wealthiest people, released earlier this month, down from No. 7 in 2012.

The EBX Group comprises more than a dozen subsidiaries, including MPX, the OGX oil and gas producer, the MMX mining company, the OSX shipbuilder, and the LLX logistics company.

http://www.globalpost.com/dispatch/news/agencia-efe/130329/eon-stake-brazilian-magnate-eike-batistas-mpx-energia