BNDES aims to reach R$ 10 billion in 'divestments' in 2018.

Reuters - Divestments by the National Bank for Economic and Social Development (BNDES) in company stakes have already totaled around 6 billion reais this year, and the expectation is that they could reach 10 billion reais by the end of the year, said the bank's investment director, Eliane Lustosa, this Thursday.

These sales transactions were carried out through direct market negotiations, but the bank is considering reviving a past practice of structured equity sales, the executive said.

Without revealing details of the sales, she highlighted that the bank has an additional 8,5 billion reais to receive from the merger between Suzano Papel e Celulose and Fibria Celulose, which is still under review by regulatory authorities.

Since there is no deadline for approval of the merger by authorities in Brazil and abroad, the bank's initial estimate was that it could take up to a year and a half to receive the 8,5 billion reais related to the operation announced in March, that is, only next year.

"It will surpass 2017, yes (we will surpass 10 billion this year), but that depends on market behavior," the executive told journalists at a Getulio Vargas Foundation event in Rio de Janeiro. Last year, sales of stakes totaled approximately 7 billion reais.

She emphasized that the bank's portfolio is still heavily concentrated in holdings in large companies, but the idea is to diversify it even further.

The bank's stakes in Eletrobras, Petrobras, JBS, Vale, Suzano, and Fibria comprise a large portion of its equity portfolio, valued at approximately 85 billion reais. When asked if BNDES's divestment could include one of these large holdings, Lustosa said: "In the past, there was a philosophy that the bank had a strategic portfolio, and that no longer exists. Any liquid and mature asset is eligible for sale."

BNDES's holdings in companies are managed by BNDESPar.

"We are in a process of selling gradually because nobody is going to throw money away, but we have 1,8 billion (reais) in 37 investment funds and a total of 300 companies... the volume is still small, but the idea is to advance more and more in funds with innovation content," he said.

STRUCTURED
The executive said that BNDES has already begun talks with banks regarding future structured sale transactions of stakes that could be more profitable and advantageous for the bank.

"We are working intensively on refining this process, and the idea is that soon we will be able to hire banks for sales that we believe, when structured, will generate better conditions than the market sales we are currently conducting," he emphasized.

Lustosa said that for each potential asset sale there may be a different advisor. "We are already talking to banks to define the selection process. It could be one bank for each asset, or a consortium. The bank would do the modeling and we would analyze whether BNDES's role has already been fulfilled, analyze fair pricing, and other factors," he stated.

BNDES is also improving internal processes to justify to the country's oversight bodies—the Federal Court of Accounts (TCU), the Ministry of Transparency, and the Comptroller General of the Union, among others—the selection of these banks for structured operations, and to explain the criteria for selling these securities and the market parameters.

By Rodrigo Viga Gaier