April 21 - Banco de Brasilia (BRB) has entered a memorandum of understanding with private firm Quadra Capital to set up an investment fund designed to assume and monetize assets linked to transactions BRB recorded from Banco Master. The MoU, published late on Monday, values those assets at 15 billion reais, equivalent to $2.9 billion.
Under the terms laid out in the memorandum, between 3 billion and 4 billion reais would be delivered in cash. The balance of the reference value is designated to be converted into subordinated shares of the new investment fund, which Quadra Capital would manage with the objective of monetizing the assets over time.
The document states the transaction is intended to help BRB divest those positions and thereby bolster its capital structure and liquidity. Completion of the operation remains conditional on the fulfillment of the requirements specified in the MoU.
Legal proceedings and investigations tied to Banco Master remain an important backdrop to the agreement. On April 16, federal police detained former BRB chief executive Paulo Henrique Costa on suspicion that he negotiated the receipt of 146 million reais in bribes as part of a criminal scheme said to benefit Banco Master. That arrest forms part of the fourth phase of Operation Zero Compliance, an inquiry that began in November last year.
The operation has previously involved Banco Master and its owner Daniel Vorcaro, who is currently in custody. Banco Master was liquidated by Brazils central bank in the same month the investigation began. At that time, a court order removed Costa from his role at BRB.
Costa's lawyer, Cleber Lopes, has said the defense remains firm in its belief that his client did not commit any crime.
Aside from the legal context, the memorandum leaves open material conditions that must be satisfied before the fund formation and asset transfers are finalized. The MoU sets out the structure for combining an initial cash component with subordinated equity in the management vehicle, rather than a straight cash sale.
The proposed fund approach assigns Quadra Capital responsibility for managing and seeking to monetize the portfolio of assets received from Banco Master, while providing BRB with an immediate partial cash inflow and a subordinated stake in the longer-term recovery value.