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BNDES to resume acquiring stakes in Brazilian companies via BNDESPAR


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According to Market Intelligence, April 2023

BNDES to resume acquiring stakes in Brazilian companies via BNDESPAR

Banco Nacional de Desenvolvimento Econômico e Social will resume investing in shares of Brazilian companies through its investment arm, BNDESPAR, after discontinuing the practice in 2015, Folha De S.Paulo reported, citing BNDES President Dyogo Oliveira.

BNDES had suspended the practice after experiencing losses from investments that did not yield expected returns, the report said. BNDES also faced alleged irregularities in certain operations in 2015, such as the purchase of a stake in meatpacking company JBS.

However, BNDES will now only be allowed to invest in medium-sized companies with annual revenues between 90 million reais and 1 billion reais, with a 30% investment limit in each of the companies' capital stock. Unlike in the past where an incentive policy for specific sectors were put in place, each operation will now be analyzed on a case-to-case basis. The bank formerly prioritized pre-operating companies and major national players, such as oil company Petrobras and mining firm Vale SA.

BNDES also looks to be an IPO investor, with BNDESPAR acting as a type of anchor investor. Again, the state-owned bank will only be permitted to acquire 30% of these companies.

In 2019, the bank is aiming to reduce its participation in "mature companies," which will involve the gradual sale of its holdings in national giants, Oliveira said.

To address irregularities in its dealings, BNDES has hired a second external audit to investigate alleged breaches in service export operations.

As of Dec. 12, US$1 was equivalent to 3.85 Brazilian reais.