Brazilian mining company Vale announced an offer to buy back local bonds, called as participating debentures linked to iron ore and copper production in certain of the company’s operations, in a transaction that could reach 16.3 billion (bn) reais (US$3bn).
Currently, there are approximately 388.5 million debentures in circulation and Vale offers a payment of R$42 per share, which represents a premium of almost 17% compared to the current market value of approximately R$36.
The debentures in question were issued in 1997, during the company’s privatization process, with the aim of guaranteeing former shareholders the right to participate in the future benefits of mineral deposits owned by Vale and its subsidiaries, which at the time were still in the initial stages of exploration.
“Investors holding these debentures receive compensation based on Vale’s production in specific iron ore and copper areas. When these bonds…
