August 13, 2018 / 3:41 PM / 3 months ago

Brazil's Bradespar debt sale to pay for Dantas judgment - source

SAO PAULO, Aug 13 (Reuters) - Brazilian holding company Bradespar SA, one of the largest shareholders in miner Vale SA, plans to use the proceeds of a 2.4 billion real ($616 million) commercial paper sale to pay for a large court award in a dispute with other Vale shareholders, one source with knowledge of the matter said.

Bradespar, controlled by Banco Bradesco SA, announced the commercial paper issue earlier on Monday. Bradespar and Litel Participações SA, another big Vale investor comprising a handful of large pension funds, are on the hook for a 4 billion-real judgment awarded by a Rio de Janeiro court in May to fellow shareholder Elétron SA , a holding company controlled by veteran banker Daniel Dantas.

Elétron, part of a group that bid in an auction to privatize Vale in 1997, won the award after suing Bradespar and Litel over an option to increase its stake in Vale years ago, Bradespar has said in recent filings, adding that its appeals so far have not been successful.

Both holding companies are appealing the decisions, but an injunction required Bradespar and Litel to deposit guarantees for the payment to Eletron by Tuesday. Bradespar said in a filing last month that the amount awarded to Elétron was incorrectly calculated. ($1 = 3.8964 reais) (Reporting by Tatiana Bautzer; editing by Jonathan Oatis)

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