|
| Shree Renuka inks deal to buy 51% in Brazilian firm |
| Press Trust of India / Mumbai Feb 21, 2010, 19:40 IST |
|
Shree Renuka Sugars (SRSL) today announced that it has entered into definitive agreements with Brazilian company, Grupo Equipav for an investment of Rs 1,530-crore ($329 million) for a majority controlling stake of 51 per cent, a top company official said here.
"We have entered into definitive agreement with Brazil-based, Grupo Equipav for an investment of Rs 1,530 crore ($329 million) leading to a majority controlling stake of 51 per cent. Equipav is one of the largest sugar/ethanol companies in Brazil," Shree Renuka Sugars Chairperson Vidhya Murkumbi told reporters here.
Brazilian company consist of two very large and modern sugar/ethanol mills with integrated co-generation facilities in Sao Paulo state in Southeast Brazil having a combined cane crushing capacity of 10.5 million tonnes of cane per annum. Shree Renuka Sugars will achieve a majority stake of 50.79 per cent by May 2009 and the balance stake in the venture would be held by the founding Equipav group.
The acquisition will be financed through, Rs 500-crore raised by the company through QIP last year and Rs 185 crore from conversion of warrants into equity. The balance amount will come from internal accruals only and is has no plans for borrowing, Murkhumbi said.
The Equipav had net debt of about Rs 3,821 crore ($822 million) as on December 2009.
"The debt of Rs 3,821-crore, which is huge in nature has to be restructured," Murkumbi said.
The deal is subject to approval of an acceptable debt restructuring package by the lenders to the company and certain other conditions customary to such transactions. Closing is expected in 40 days, SRSL's Chief Financial Officer, K K Kumbhat said.
Banco Itau BBA, Brazil and Motilal Oswal Investment Advisors acted as the strategic and financial advisors to Shree Renuka.
Towards its future plans, the Equipav's capacity will be expanded to a combined cane crushing capacity of 12 million tonnes per annum and 295 MW of co-generation capacity with a capital expenditure of Rs 500-crore.
With this deal, Shree Renuka Sugars will become largest sugar player in the country and third-largest sugar and ethanol player in the world.
Brazil is the largest producer and exporters of sugar with India being the largest consumer of sugar in the world.
"This acquisition will significantly multiply SRSL's presence in the centre-south region of Brazil and enhance its competitiveness and size in the global sugar business.
"This investment brings us closer to building a global sugar and ethanol business combining the most cost-efficient and scalable production areas in the world along with a leading presence in the largest ethanol and sugar markets of the world," Shree Renuka Sugars Managing Director Narendra Murkumbi said.
In November 2009, SRSL has acquired 100 per cent of Vale Do Ivai, a Brazilian sugar/ethanol production company. The acquisition included two sugar/ethanol production facilities in Parana, Brazil with a combined cane crushing capacity of 3.1 million tonnes of cane per annum and a shareholding in logistic assets including terminals for storage and loading of sugar and ethanol at the port of Paranagua, Brazil.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
