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EXCLUSIVE-Pension funds, BNDESPar plan to sell about 3 pct of Vale -sources

SAO PAULO/RIO DE JANEIRO, March 21 (Reuters) - Brazilian pension funds led by Previ are planning to sell 10 percent to 12.5 percent of their stakes in iron ore miner Vale SA through a public offering, four people with knowledge of the matter said.

The share sale may be worth up to 8 billion reais ($2.4 billion) if BNDESPar, the investment arm of state development bank BNDES, also sells part of its Vale stake, the sources added, asking for anonymity because the talks are still private.

Japanese trading house Mitsui & Co Ltd and holding company Bradespar SA, which are members of Vale's controlling shareholder bloc along with the pension funds, will not sell any portion of their stakes in the operation, according to the sources.

The share sale represents a long-rumored but so far undisclosed next step in migrating Vale to a dispersed ownership structure after the world's largest iron ore miner ended its former dual-share structure in October.

Vale shares have gained more than 30 percent since then to trade at 42.25 reais in midday Wednesday trading in Sao Paulo.

The pension funds and BNDESPar originally planned the offering for next month, but a major shareholder recently began considering postponing it to next year, due to the risk of election-year volatility in Brazil's market, one source added.

The transaction has been discussed in recent months by Previ, Petros, Funcef and Fundação Cesp, which manage pensions for the employees of state-controlled Banco do Brasil SA , Petroleo Brasileiro SA, Caixa Economica Federal and CESP Companhia Energetica de Sao Paulo, respectively.

If BNDESPar joins the transaction, it would also sell 10 percent to 12.5 percent of its stake, sources said. The funds own 21.3 percent of Vale through holding company Litel Participações SA and BNDESPar holds 7.8 percent.

A joint sale with both the pension funds and BNDESPar would involve between 2.9 percent and 3.6 percent of Vale's total capital, the sources added.

Previ, Petros, Funcef, Fundação Cesp, BNDESPar, Mitsui and Bradespar declined to comment.

Controlling shareholders were forbidden to sell their stakes in Vale for six months after the transaction that converted the miner's different classes of stock into unified common shares.

The lock-up period ended in February for half of the controlling shareholders' stakes. The rest of their stakes will be locked up through 2020.

Investment banks have not been hired yet to manage the offering because shareholders are still deciding on details of the transaction.

PENSION FUND LOSSES

The sale could help pension funds Petros and Funcef to cover payments to retirees while the funds recover from losses and recent corruption probes into allegedly bad investments. The exception in the group is Previ, which has the largest stake in Vale and is coming off a string of profitable years for its investments.

BNDESPar has recently begun divesting from huge stakes in Brazilian companies amassed during a period in which the bank invested heavily in so-called "national champions."

The investment arm of BNDES is expected to make the largest divestment in its history, selling part of its stake in wood pulp maker Fibria Celulose SA as part of a tie-up with rival Suzano Papel e Celulose SA.

In a recent interview with Reuters, Bradesco Chief Executive Octavio de Lazari Jr said the bank intends to keep its stake in Vale: "We still expect to obtain high potential returns with Vale. We see a good future for the company," he said.

Mitsui also intends to stay in Vale for the long term as a strategic investor, according to sources.

($1 = 3.296 reais) (Reporting by Tatiana Bautzer and Carolina Mandl in Sao Paulo, Rodrigo Viga Gaier in Rio de Janeiro Editing by Brad Haynes and Lisa Shumaker)