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(Bloomberg) – Brazil's largest pension fund was hit hard by Vale's record stock price drop following the collapse of the Brumadinho dam in Minas Gerais.
Previ, Employee Pension Fund. Bank of Brazil saw the value of its indirect stake of 17.6% in the iron ore giant drop by 12.7 billion rubles (3.4 billion US dollars) after the fall of 25% of the shares of the minor. Previ is Vale's largest indirect shareholder and holds the largest equity stake in Vale.
Vale was shaken by the tumult of one of its inactive mining waste dams on Friday. the mud was dumped in a rural valley of the Brazilian state of Minas Gerais. On Tuesday, the death toll was 65 and there were 279 missing.
The disaster, which occurred after a similar event in the Samarco-Vale subsidiary in 2015, triggered a series of degradations by badysts in the middle of greater risks of losses with compensation, prosecution, increased surveillance and closure of mines. "After Samarco and this other dam breakup, I thought it best to go out and reevaluate," said Ray Zucaro, investment manager at RVX Asset Management in Miami. He has cleared all his exposure to Vale's ties after the disaster for the moment. "When the time has come to go back, I would say it's when I'll have a better idea of the cost and we need more time."
Monday's fall took over $ 72 billion from Vale's market, the company's worst loss in a single day. The crash is almost twice the market value of JBS, the world's largest supplier of beef. Vale, headquartered in Rio de Janeiro, was Brazil's third largest company at market value on Thursday and now ranks fifth.
Norwegian and Swedish pension funds announced that they would re-evaluate their investments in while a Danish fund said it would not buy back additional shares before disposing of funds. 39, additional information on the causes of the violation.
Previ said Monday in an e-mail release that he had a "diversified portfolio of badets" that can absorb the short-term impact of the Vale downturn. Previ's resources are sufficient to meet its obligations to the participants, which means that it does not have to sell Vale's shares to increase its liquidity, a- he added.
The Brazilian government has raised its tone regarding Vale and its second disaster administration in about three years. Although Vale has taken action in recent years to protect itself from state intervention, the government remains indirectly the largest shareholder of the company through Previ, the others Pension Fund and BNDES Shareholder.
Previ and Others Pension funds that were part of Vale's controlling shareholders were discussing the sale of at least a portion of their shares of the company to the market, but had never advanced the plan.
"The market seems to give the accident a greater chance of a significant impact on Vale's way of operating," said Leonardo Rufino, portfolio manager of Pacifico Gestão de Recursos, which manages around 2 billion rubles and is exposed to Vale and the holding company Bradespar
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