Group will make offer at market price to repurchase Paper Excellence’s stake and end 7-year dispute
J&F Investimentos, the controlling shareholder of Eldorado Brasil Celulose, will make an offer at market prices to repurchase Paper Excellence’s shares in the company. The proposal could end a dispute that has been ongoing since 2017.
That year, J&F Investimentos signed a contract to sell 100% of Eldorado Celulose’s shares to Paper Excellence for R$15 billion. The transfer of 49.41% of Eldorado’s shares to the multinational was carried out, but the remainder of the agreement was not concluded.
The dispute between J&F and Paper Excellence began in 2018, when Paper Excellence’s 1-year contract to acquire 100% of Eldorado Celulose’s shares began to be discussed initially in the arbitration court and, later, also in court.
The offer to buy back Paper’s 49.41% stake at market price would guarantee the Indonesian company a high return on the amount invested for the purchase.
This Monday (November 18, 2024), the possibility of an agreement to end the litigation was discussed in a conciliation hearing at the STF (Supreme Federal Court). Minister Nunes Marques, rapporteur of the case at the Court, initiated a conciliatory procedure to seek a consensus solution between the companies.
Eldorado is one of the largest cellulose producers in the country, with a manufacturing unit in Três Lagoas (MS) and a port terminal in the Port of Santos, from where it exports to 40 countries. It was founded in 2010 by the J&F Group, owned by brothers Joesley and Wesley Batista.
After challenges to the terms of the sales contract signed in 2017, the case was taken to an arbitration chamber. The arbitration judges won the case to Paper Excellence in 2021, concluding that J&F had the obligation to sell 100% of Eldorado to the Indonesian company.
However, the process was suspended by the TRF-4 pending judgment of a popular action asking for the sale of Eldorado to be undone because Paper Excellence did not request the prior authorizations from Congress and , required for the acquisition and leasing of land. by foreigners.
A consensual solution between the companies would end legal and internal disputes between shareholders and allow Eldorado to unlock investments in its expansion project.
Read the full note from J&F Investimentos:
Both parties have shown interest in an agreement that ends the dispute. Thus, Minister Nunes Marques opened a conciliation procedure in which the parties will forward their proposals in search of a consensual solution.
J&F is ready and has available resources to make a proposal for all the shares held by Paper Excellence in Eldorado at a market value, which guarantees high profitability for its investment and frees Eldorado from the litigation promoted seven years ago by the foreign company, enabling the resumption of investments and job creation.
Read more about the Eldorado Brasil Celulose case:
