February 20, 2017 / 11:02 AM / a year ago

Vale readies for diluted ownership as partners renew accord

SAO PAULO, Feb 20 (Reuters) - Brazilian miner Vale SA will become a company with dispersed share ownership, it said on Monday, in a move aimed at enhancing transparency and equal rights for all shareholders in the world’s largest iron ore producer.

Vale and its largest shareholders agreed to renew their shareholder accord for another three and a half years, with substantial changes to its corporate structure, it said in a securities filing.

Under the plan to turn Vale into a company with diluted ownership, holders of its Class A preferred shares will receive 0.9342 common share based on a 30-day average through Feb. 17.

The agreement to change the company’s structure will last for six months. The group of shareholders running the investment holding company that controls Vale will remain together until November 2020, when the new accord is due to expire.

Holding company Bradespar and pension fund Previ proposed the conversion of Vale’s different types of stock into a single common one as the first step in transforming the mining giant and increasing its allure to investors, people familiar with the matter told Reuters in January.

The move should generate goodwill of 3.1 billion reais ($1 billon) to be shared among all Vale shareholders. To facilitate the migration to diluted ownership, Vale will issue new shares that will be given to members of the holding company known as Valepar SA.

$1 = 3.10 reais Reporting by Guillermo Parra-Bernal, editing by Louise Heavens

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