Last Monday, the 3rd, in a decision taken by the Federal Regional Court of the 4th Region (TRF-4), the transfer of control of Eldorado Brasil Celulose to Paper Excellence (PE) was suspended. The decision was signed by Judge Rogério Favreto, causing a turnaround in the case.
According to the collegiate, the PE must present proof that the National Institute of Colonization and Agrarian Reform (Incra) and the National Congress have authorized the acquisition of Eldorado before signing the contract in 2017.
The decision states that until all the necessary approvals are presented, the transfer of Eldorado to C.A. Investment (Paper Excellence representative in Brazil) will be suspended. As a result, J&F Investimentos remains the controller of the pulp manufacturer.
According to the law that regulates the purchase and possession of land and rural properties in Brazil by foreigners, foreign legal entities may only acquire rural properties for the implementation of agricultural, livestock, industrial or colonization projects after approval by the competent federal agency.
Considering that PE did not present any of these approvals, the sale of the J&F company to the Indonesians was prevented, since Eldorado has more than 250 thousand hectares of land with eucalyptus plantations.
The dispute between Paper Excellence and J&F for control of Eldorado began in 2018, during negotiations for the company’s purchase, whose payment would be made in two stages – the first was R$ 3.8 billion, corresponding to 49.41 % from the company.
However, with the expiration of the one-year contract that PE had to complete the complete acquisition of Eldorado’s shares, without payment for the remaining 50.5% being made, the dispute was taken to court.
