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Report: Bradespar sells 2.40B reais in commercial notes to pay for damages

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Report: Bradespar sells 2.40B reais in commercial notes to pay for damages

Brazil's Bradespar SA on Aug. 14 issued a single tranche of commercial papers worth 2.40 billion reais to pay for damages in a legal dispute, Reuters reported, citing a source knowledgeable about the matter.

According to a company filing, Bradesco's issuance is composed of 24 365-day commercial notes with a nominal value of 100.0 million reais each, with proceeds from the issuance to be used to comply with the company's existing obligations.

Bradespar, which holds a stake in mining company Vale SA, will reportedly use the proceeds to compensate for a 4 billion-real court judgment awarded to holding company Elétron SA, also a Vale shareholder.

Elétron sued Bradespar and Litel Participações SA, Vale's biggest shareholder, over an option to raise Elétron's stake in the mining firm. Both Bradespar and Litel are reportedly appealing the judgment, with Bradespar saying that the amount granted to Elétron was wrongly computed.

Meanwhile, Bradespar also approved the renewal of the program for the acquisition of treasury stock and its subsequent sale or cancellation. The company will acquire up to 10,870,000 shares, composed of 970,000 common shares and 9,900,000 preferred shares up until Aug. 14, 2019.

Bradesco SA Corretora de Títulos e Valores Mobiliários will act as an intermediary for the share repurchase program.

Bradespar is controlled by Banco Bradesco SA.

As of Aug. 13, US$1 was equivalent to 3.90 Brazilian reais.