Sources say Mercuria is moving closer to purchasing Raizen's Argentine assets worth over $1 billion.

According to two sources familiar with the situation, a Swiss-founded energy company Mercuria Energy Group is advancing in its bid to purchase a'refinery' and a large number of gas stations located in Argentina. The acquisition would be from Raizen, a Brazilian sugar and ethanol producer in financial trouble.

A source told us that the deal may be done soon, but there is still a chance it won't be. The signing could still be weeks away according to a second source. They also said that it is possible that no binding agreement will yet have been signed.

One of the two individuals?said global energy and commodities conglomerate Vitol Group?had?also pursued the acquisition of?assets from Raizen in Argentina at a previous time, but that talks with Mercuria progressed.

Mercuria has not responded to our requests for comment. Vitol and Raizen declined comment.

Bloomberg was the first to report Mercuria's imminent deal to purchase Raizen?assets.

Raizen is a joint-venture between the Brazilian conglomerate Cosan, and Shell, an oil company listed in London, that has suffered a string of heavy quarterly losses, and high debt levels.

Two major credit rating agencies downgraded the company this week due to the 'increasing financial pressure.

Raizen's score was slashed by Fitch to a 'B' at first, and then to a 'CCC+' the next day. S&P Global Ratings downgraded Raizen from 'CCC+ to 'B'.

Raizen announced late Monday that it had appointed Pinheiro Neto as its legal advisor and Cleary Gottlieb, as its financial advisor. Reporting by Luciana and Oliver Griffin. Mark Potter edited the story.

(source: Reuters)