Mercuria to acquire Argentina downstream business from Raizen for $1.42 Billion
Brazilian sugar and ethanol producer Raizen announced on Thursday that its'subsidiary Raizen Energia' had 'agreed? to sell its downstream operations?in Argentina to Mercuria Energy Group?for $1.42 billion.
In a filing with the Securities and Exchange Commission, Raizen stated that the transaction value consisted of a cash payment due at the closing, subject to?customary adjustments?, such as changes in working capital, net debt, or other provisions in the agreement.
It added that the buyer would?also assume all debts of Raizen Argentina S.A.U.
Raizen stated that "the net proceeds of the transaction will be used for managing the capital structure of?the company."
The joint venture, between Shell and Brazilian conglomerate Cosan has been looking for ways to reduce its debt, under pressure from high capital expenditure, adverse weather, and wildfires that have affected sugarcane crop.
In a filing, Mercuria said that the deal was in line with its strategy to optimize?its portfolio of assets, simplify its operating structure, and maintain a disciplined capital allocation with a focus primarily on priority geographies and markets.
The company's creditors started evaluating Raizen’s final proposal on Wednesday for a restructuring out of court covering approximately 65 billion reais (12,84 billion dollars) in debt. This is the largest deal ever done by a Brazilian company.
The meetings with bondholders will end on Monday.
(source: Reuters)
