Company has been fighting legal dispute with partner J&F for control of pulp producer Eldorado
10/18/2022
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Paper Excellence has been fighting a legal dispute with partner J&F Investimentos for the control of pulp producer Eldorado — Foto: Divulgação
After having called the former president Michel Temer (Brazilian Democratic Movement (MDB) to advise it legally, Paper Excellence (PE), which for four years has been fighting a legal dispute with partner J&F Investimentos for the control of pulp producer Eldorado, has now hired the former governor of São Paulo João Doria as an “advisor”. Mr. Doria was also São Paulo’s city mayor and won the Brazilian Social Democracy Party’s (PSDB) primaries in November to choose the party’s presidential candidate, but later resigned after internal disputes.
According to sources close to PE, owned by Indonesian businessman Jackson Wijaya, the contract signed with D. Advisors Ltda, which has Mr. Doria and his son as partners, has the objective of prospecting new businesses. The mission would be to search for pulp and paper assets available for purchase in the country. PE has grown through acquisitions. In July, it agreed to buy the Canadian Resolute Forest Products, the third acquisition since it signed a contract with J&F in 2017.
On the other hand, the former-governor’s team, when asked about the possibility of the company having been hired to seek an agreement between PE and brothers Joesley and Wesley Batista, owners of J&F, said that Mr. Doria was hired to “evaluate and guide Paper Excellence,” but not necessarily “to make any kind of agreement.”
According to the registration with the Secretariat of Federal Revenue, D. Advisors was formally established ten days ago. The information about the hiring of Mr. Doria by PE was published by columnist Lauro Jardim, with newspaper “O Globo”, and confirmed by Valor.
According to two sources heard by Valor, Mr. Doria sought out Wesley Batista, with whom he has a long-standing friendship, to inform him about providing services to PE, which owns a 49.41% stake in Eldorado through CA Investment (Brazil).
Sources, however, say that a deal seems unlikely. On one side, the Batista brothers refuse to talk to any interlocutor other than Jackson Wijaya himself about an armistice. On the other, PE has been saying that it has already won an arbitration and there is no proposal from J&F to end the conflict – the Indonesian businessman, in turn, rejects another meeting with the brothers.
J&F and PE initiated in September 2018 the largest ongoing business conflict in the country, worth R$15 billion, over control of the pulp producer. PE won the arbitration unanimously, but J&F is trying to overturn the ruling, under allegations of conflict of interest of one of the arbitrators and that the partner would be behind a hacker attack on its email servers.
In the most recent development, about two weeks ago, the Civil Police of São Paulo included two PE executives in an investigation taking place in Diadema (Greater São Paulo) in connection with the hacker attacks.
The Prosecution Service is yet to decide whether there will be criminal prosecution. In a statement, the PE said it received the news with perplexity and recalled that an investigation with the same content, in São Paulo, has already been filed, also by recommendation of the São Paulo State Attorney General’s Office
Also in late September, the judge José Benedito Franco de Godoi, from the 1st Reserved Chamber of Business Law of the São Paulo State Appellate Court (TJ-SP), suspended a decision that could finally culminate in the immediate transfer of control of Eldorado to PE.
Both the funds for payment for the control of Eldorado – more than R$ 5 billion – and the shares held by J&F, or 50.59% of the pulp producer, are deposited in a court-held account. PE and J&F declined to comment.
*By Stella Fontes, André Guilherme Vieira — São Paulo
Source: Valor International