Brazil's Raizen sold sugarcane plant to Brazil for $75 Million

The Brazilian sugarcane processing company Raizen has agreed to sell the Leme plant located in southern Brazil for 425,000,000 reais (74.78 Million dollars) as part its strategy to trim portfolio and reduce debt.

In a filing with the Securities and Exchange Commission, Raizen, world's biggest sugar producer, announced that it was selling the sugarcane plant as well as 1,5 million metric tonnes of sugarcane to local companies Ferrari Agroindustria, Agromen Sementes Agricolas.

Raizen stated that the unit, located in Piracicaba in Sao Paulo state, has a capacity installed of 1.8 millions tons of sugarcane each harvest. The deal will be subject to Cade, the local antitrust authority.

Management has stated that Raizen, a joint-venture between Shell and Brazilian conglomerate Cosan has focused on financial restructuring and operational reorganization in order to reduce the cash burn after a recent growth cycle.

Citi analysts wrote to their clients that the value of the transaction is lower than recent deals in the industry.

According to the filing, Raizen will receive resources at the deadline.

(source: Reuters)