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UPDATE 1-Asian groups vie for stake in southern Brazil railroad -source
November 29, 2017 / 1:48 PM / 15 days ago

UPDATE 1-Asian groups vie for stake in southern Brazil railroad -source

(Recasts with source, details of talks)

SAO PAULO, Nov 29 (Reuters) - China Communications Construction Co Ltd and Japan’s Mitsubishi Group and Sumitomo Corp are vying for a stake in a railroad owned by Brazil’s Rumo SA, a person familiar with the matter told Reuters on Wednesday.

Railroad operator Rumo, which is controlled by energy and logistics group Cosan SA, aims to sell a minority stake in the Malha Sul rail system, a 7,200 km-stretch (4,473 miles) serving the south of Brazil, the source said.

Rumo has hired the investment banking unit of Bank of America Corp to sell a stake in the Malha Sul, according to Brazilian newspaper O Estado de S. Paulo, which first reported the talks, citing unidentified sources.

The Chinese company offered to inject 2 billion reais ($622 million) into the railroad and invest another 6 billion reais over a 10-year period, according to the paper.

“It is a complex transaction which could take several months to complete,” the person familiar with the matter told Reuters, declining to comment on the value of the deal.

The source did not specify which company in the Mitsubishi Group had shown interest in the railroad. A representative for the Brazilian unit of Mitsubishi Corp said the company was not involved in any talks regarding Malha Sul.

Rumo, CCCC and Sumitomo did not immediately reply to requests for comment. Bank of America declined to comment.

$1 = 3.21 reais Reporting by Tatiana Bautzer and Ana Mano Editing by Chizu Nomiyama

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