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  • March 2017 (Revised June 2019)
  • Case
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Mubadala and EBX: To X or to X It?

By: Nori Gerardo Lietz, Ricardo Andrade and Sayiddah Fatima McCree
  • Format:Print
  • | Language:English
  • | Pages:29
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Abstract

In April 2012, Mubadala, Abu Dhabi's sovereign wealth fund invested $2 billion in Brazilian conglomerate EBX, believing the company to be undervalued by the public markets. Shortly thereafter, however, EBX and its multiple business lines began to spiral downward. Hani Barhoush and Oscar Fahlgren, members of Mubadala's investment team, were now charged with leading the restructuring efforts on behalf of Mubadala. The situation was exceptionally complex and involved dealing with different creditors, untangling cross-collateral clauses from EBX’s subsidiaries’ loans, and foreclosing on personal guarantees from Batista. There were also strong political challenges, since most companies operated in tightly regulated markets, some were publicly-traded, and many had received substantial subsidized financing from Brazil’s Development Bank (BNDES). Finally, the country’s economic and political environments were rapidly deteriorating, with a combination of stagflation, rising interest rates, and successive popular demonstrations causing the gradual loss of governability and ultimate impeachment of President Dilma Vana Rousseff.

Keywords

Sovereign Wealth Funds; Conglomerates; Investing; Corporate Structure; International; Sovereign Finance; Business Conglomerates; Investment; Financing and Loans; Restructuring; Organizational Structure; Economy; Brazil; Abu Dhabi

Citation

Lietz, Nori Gerardo, Ricardo Andrade, and Sayiddah Fatima McCree. "Mubadala and EBX: To X or to X It?" Harvard Business School Case 217-065, March 2017. (Revised June 2019.)
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About The Author

Nori Gerardo Lietz

Finance
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Related Work

    • May 2018
    • Faculty Research

    Mubadala and EBX: To X or to X It?

    By: Nori Gerardo Lietz and Sayiddah Fatima McCree
    • March 2017 (Revised June 2019)
    • Faculty Research

    Mubadala and EBX: To X or to X It?

    By: Nori Gerardo Lietz, Ricardo Andrade and Sayiddah Fatima McCree
Related Work
  • Mubadala and EBX: To X or to X It? By: Nori Gerardo Lietz and Sayiddah Fatima McCree
  • Mubadala and EBX: To X or to X It? By: Nori Gerardo Lietz, Ricardo Andrade and Sayiddah Fatima McCree
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