SAO PAULO – Brazilian pension fund Previ is not likely to sell its shares in Vale in a public offering this year, a person with knowledge of the matter said on Wednesday, a week after the iron-ore miner announced a more generous dividend policy.
Holding on to its full Vale stake would allow Previ to take advantage of Vale's growing dividends as earnings are seen improving, the source said, requesting anonymity to discuss the matter freely.
On March 29, Vale approved a dividend policy that will pay shareholders 30% of adjusted earnings before interest, tax, depreciation and amortisation.
In a note to clients, Credit Suisse said Vale's new dividend policy sets the company as one of the highest yields in the global commodities space.
Previ declined to comment on the matter.
Previ's decision does not mean other major Vale shareholders will not sell part of their stakes, the source added.
Pension funds Previ, Petros, Funcef and Fundação Cesp have discussed the sale of 10% of 12.5% of their Vale stakes in recent months in a transaction that could be worth up to $2.4-billion if BNDESPar, the investment arm of state development BNDES, joins the offering.
The funds manage pensions for the employees of state-controlled Banco do Brasil, Petróleo Brasileiro, Caixa Econômica Federal and Cia Energética de São Paulo, respectively.