VLI will have three new partners, two foreign ones

Valor da Logística Integrada (VLI), a company controlled by Vale, should now have three new partners, two of them foreigners, starting later this month. On July 31, the board of directors of the mining company will meet in Rio de Janeiro and should make a final decision on the new shareholders of VLI, a company focused on providing services for general freight. The company comes with an ambitious business plan, which foresees investments of about $4 billion in ports and railroads between 2013 and 2017.

The CEO of Vale, Murilo Ferreira, confirmed the entry of new partners in the logistics company: “The issue will be decided by the board of directors of Vale on July 31. There was 12 interested parties, and it is almost confirmed that we will have three new shareholders in VLI,” he said. Ferreira said no names for the new partners or the percentage that Vale will sell, but confirmed that the design should lead the mining company to become a minority shareholder in VLI. Vale had signaled it could sell 50% or more of the capital of VLI. Asked if this share could reach 70%, Ferreira said: “It can happen.”

The executive said that among the new partners there are financial investors and logistics operators, all of them with long-time market activity. The CEO of Vale also confirmed that there are two foreigners on the list. “It’s an extraordinary sign, because it is high [investment] amount. It is $3.95 billion of investment, with substantial amounts already in the beginning. At a time when many people are having doubts about Brazil, it is a positive sign. Besides, it demonstrates that there are spaces that can be filled with high profitability,” he said. Money from the sale will be allocated part in the Vale’s cash, part in the VLI’s.

Ferreira said that neither Vale nor VLI shall participate in the new auctions of railroads. According to him, VLI must be modernized, change the rolling stock, do more terminals and participate in new ports. “What it [VLI] has in assets is enough to have an attractive portfolio of projects,” he said. VLI was created in 2011 and has appeared to meet the demand of general freight of shippers using the Ferrovia Centro-Atlântica (FCA) and the North-South Railroad (FNS), Vale’s original concessions. VLI’s plan includes investments to expand capacity of the railroads and increase the supply of the services offered to users. Investments in new ports are also planned, and terminals will be built within the country, linked to railroads and ports, which will act as freight “integrators”.