Vale To Sell 26.5% Stake In VLI To Brookfield Asset Management For $848 Mln

(RTTNews) - Brazilian Mining giant Vale S.A. (Vale) agreed Monday to sell a further 26.5% of Vale's stake in its integrated general cargo logistics company VLI S.A to Brookfield Asset Management, Inc. (BAM, BAM_A.TO) for 2 billion Brazilian Reais or $848 million. VLI is an integrated general cargo logistics company wholly-owned by Vale.

The move is in line with Vale's strategy of trimming its investment in non-core assets in order to focus on its main business and significantly reduce future capital expenditures on these assets.

The company is now focusing on capital allocation discipline and value maximization for shareholders.

The additional stake sale to Brookfield will see Vale left with a 37.6 percent stake in VLI. However, the deal is subject to approval by relevant authorities, including the Conselho Administrativo de Defesa Econômica and to the usual precedent conditions.

Vale had in September agreed to sell minority stakes in VLI to Japan's Mitsui & Co. Ltd. (MITSY) and a Brazilian government fund for a total of 2.71 billion Brazilian Reais, or $1.24 billion.

It agreed to sell a 20 percent stake to Mitsui and a 15.9 percent stake to the Investment Fund of the Fundo de Garantia do Tempo de Serviço or FI-FGTS. The assets of FI-FGTS are managed by the Brazilian bank Caixa Econômica Federal.

Rio de Janeiro, Brazil-based Vale, the world's largest iron-ore producer also had revealed in September that it was in exclusive talks to sell an additional 26 percent stake in VLI to a consortium led by a subsidiary of Canadian property manager Brookfield Asset Management.

VLI is a rail-based logistics operator based on a warehouse/railway/port axis that transports general cargo for over 100 clients through an integrated logistics system comprising proprietary as well as third-party assets.

VLI has structured its operations in five corridors that are strategically positioned to serve the main agricultural and industrial regions of Brazil, with a special focus on the Center-Southeast, Center-East and Center-North corridors.

VLI owns rail concessions and subconcessions of about 10,700 kilometers, with a rolling stock of 13,000 rail cars and 600 locomotives. The company also has access to Vale's rail concessions.

VALE closed Monday's regular trading session at $14.66, up $0.23 or 1.59% on a volume of 12.02 million shares, and BAM closed at $37.99, up $0.18 or 0.48% on a volume of 0.58 million shares.