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Vale's corporate restructuring could expedite listing on Brazil's Novo Mercado

Vale SA has streamlined corporate ownership structure after major shareholders of its holding company Valepar SA approved its merger with Vale, the mining giant said Aug. 14.

This comes after the majority of Vale's class A preferred shareholders swapped their stock into common shares of the company to dissolve the investment holding company into Vale.

A total of 1,420,262,529 preferred shares, equivalent to 72.2% of the total preferred shares in circulation, were tendered as of Aug. 10, exceeding the minimum 54.09% threshold set for voluntary conversion.

Valepar shareholders — Litel Participações SA, Bradespar SA, BNDES Participações SA and Mitsui & Co. Ltd. — signed a new agreement for 20% of the issued common share capital of Vale.

The agreement will be effective until Nov. 9, 2020.

The bigger-than-expected shareholder support for the conversion plan could expedite the mining giant's listing on the São Paulo Stock Exchange's Novo Mercado, which was initially planned by 2020, and the move could happen during 2017, Reuters reported the same day. Listing on the country's strictest market potentially lures a larger investor base.

"We are working with our legal advisers to do the Novo Mercado listing as quickly as possible," Vale CEO Fabio Schvartsman told investors during a conference.

Meanwhile, CFO Luciano Siani ruled out that the company would consider buying back shares from investors who did not participate in the share swap.

In addition, Vale's board intends to call an extraordinary shareholders' meeting, to be held within 65 days, to elect independent board members to fill in the vacant positions.