BRAP3 Bradespar

Bradespar S.A. is a Brazilian investment holding company created from a partial spin-off of Banco Bradesco, approved at an Extraordinary General Meeting held on March 30, 2000. In the transaction, part of Bradesco’s shareholders’ equity, consisting of investments in non-financial companies, was transferred to form Bradespar. Bradesco’s shareholders received Bradespar shares in the same quantity, type, and class as the shares they held in the bank, thus becoming part of the shareholder base of the new company. The spin-off was ratified by the Central Bank of Brazil on May 26, 2000 and, on August 7 of the same year, Bradespar was registered as a publicly held company with the Brazilian Securities and Exchange Commission (CVM). Bradespar’s shares began trading on B3 – Brasil, Bolsa, Balcão – on August 10, 2000, under the tickers BRAP3 (common shares) and BRAP4 (preferred shares).

Since its origin, Bradespar has been structured as an investment company focused on equity stakes in other entities, without developing its own operational activities in production or service provision. The company operates as a holding whose corporate purpose is to hold equity interests and manage its portfolio, with a focus on strategic, long-term investments. Value creation for Bradespar stems mainly from the economic and financial performance of its investees, reflected in equity income, dividends and interest on equity received, as well as any gains from the sale of equity stakes. Due to its corporate structure, the company does not present information by operating segments and does not have revenue lines arising from the sale of its own products or services.

Over time, Bradespar’s investment portfolio has become concentrated in a main asset. On December 31, 2024, the company’s investment portfolio consisted of its interest in Vale S.A., one of the largest mining companies in the world. In this configuration, Bradespar operates essentially as a holding company with a significant stake in Vale, with its operating revenue derived almost entirely from equity income and interest on equity from this investee. In 2024, Bradespar recorded operating revenue of approximately R$ 1.2 billion, a direct reflection of Vale’s economic performance in the period. The absence of significant diversification in other non-financial assets means that Bradespar’s results are strongly linked to Vale’s business cycle and, consequently, to conditions in the global mineral commodities market.

Bradespar’s business model is intrinsically tied to the behavior of the mining sector, given that Vale is predominantly an exporter and has significant exposure to the international iron ore and other metal commodities markets. Factors such as global economic growth, trade disputes between major economies, geopolitical conflicts, investments in the energy transition, and changes in demand for metals indirectly but materially influence Bradespar’s results. Fluctuations in iron ore and other raw material prices, exchange-rate movements and economic policies adopted by core countries, especially the United States and China, affect Vale’s cash generation, the volume of dividends distributed, and the results recognized by Bradespar via equity income.

From an operational standpoint, Bradespar has no customers in the traditional sense, since it does not sell goods or services. The company’s revenue essentially arises from financial flows received from Vale, in the form of dividends, interest on equity and equity income. For this reason, there is no revenue concentration in specific customers, nor are there commercial policies or distribution strategies typical of operating companies. The earnings dynamics are conditioned on Vale’s shareholder remuneration policy, the miner’s profitability, and any capital gains realized on the sale of equity stakes, when they occur.

Geographically, Bradespar is a company headquartered in Brazil and primarily focused on the Brazilian capital market, through trading of its BRAP3 and BRAP4 shares on B3. The company states that it has no revenue from foreign countries, since its operating revenue originates from its investee Vale, but is recognized in Bradespar’s own accounts in Brazil. Although economically exposed to the global iron ore and other commodities environment through Vale, the company does not conduct direct operations abroad, does not maintain an international customer base and does not engage in productive activities outside the country.

In regulatory terms, Bradespar is supervised by the Brazilian Securities and Exchange Commission (CVM), the body responsible for regulating and overseeing the capital markets in Brazil and the activities of publicly held companies. The relationship with the regulator is tied to fulfilling obligations typical of listed companies, such as disclosure of information, compliance with governance rules and adherence to transparency standards required of issuers with shares traded on an exchange. The company states that it does not depend on patents, trademarks, licenses, concessions, franchises or royalty contracts to conduct its activities, which is consistent with its profile as a holding company. Bradespar also indicates that it has no specific legal and regulatory obligations related to environmental and social issues, beyond those inherent to its status as a publicly held company.

In the environmental, social and governance (ESG) field, Bradespar established a Social and Environmental Policy approved by the Board of Directors in December 2020. This policy is described as appropriate to the size, risk and simplified nature of the company’s activities, which do not include direct industrial or productive operations. The company does not adopt specific internationally referenced methodologies for this policy, does not prepare a materiality matrix, does not use the Sustainable Development Goals (SDGs) as a formal metric and does not, as yet, follow the TCFD recommendations for climate-related financial disclosures. It also does not conduct greenhouse gas emissions inventories. Bradespar justifies these decisions based on its lean administrative structure and its nature as an investment holding, while nonetheless emphasizing the institutional commitment of the Board of Directors and Executive Board to act ethically, transparently and responsibly in the use of resources and in interaction with society.

In corporate governance, Bradespar’s structure reflects its primary role as an investment vehicle listed on B3, with capital divided into BRAP3 common shares and BRAP4 preferred shares. The company maintains formal governance practices, with a board of directors responsible for strategic decisions, including management of the social and environmental policy and oversight of the relationship with Vale. Bradespar’s role as a significant shareholder in Vale, combined with its status as a publicly traded company, makes corporate governance and informational transparency central elements in how the market perceives BRAP3 and BRAP4 shares and the company’s role in the miner’s ownership structure.