Business Daily from THE HINDU group of publications
Thursday, Nov 12, 2009
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Business Daily from THE HINDU group of publications Thursday, Nov 12, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Sugar Agri-Biz & Commodities - Mergers & Acquisitions Renuka Sugars buys Brazilian firm for Rs 384 cr The deal includes two sugar and ethanol production facilities It will be funded through internal accruals Renuka Sugars will add another 3 mt of crushing capacity through this acquisition 
Our Bureau Mumbai, Nov. 11 Shree Renuka Sugars Ltd has acquired a Brazilian sugar and ethanol producer Vale Do Ivai S.A. Acucar E Alcool (VDI) for $82 million (around Rs 384 crore). The deal includes two sugar and ethanol production facilities with a combined cane crushing capacity of 3.1 million tones a year. Mr Gautam Watve, Head-Strategy and Planning, Renuka Sugars, said the deal will be funded through internal accruals which includes $105 million raised through QIP in August. “We have also taken over a debt of $240 million of which we will repay $60 million soon after the deal is executed while the rest will be paid over eight years,” he added. The acquisition has received approval of leading creditors of VDI. The Brazilian company has a third production facility that will be spun off as a separate unit and handed over to the present shareholders of VDI as a consideration for the acquisition, the company said in a statement. VDI also holds strategic stakes in several logistics assets including terminals for storage and loading of sugar and ethanol at the port of Paranagua. Larger part of the sugarcane requirements at VDI are met through its own cultivation of more than 18,000 ha of land on long lease. Crushing capacityCurrently, Renuka Sugars has a production capacity of seven million tonnes in India and will add another three million tonnes of crushing capacity through this acquisition. The company produces 1.7 million tonnes of sugar a year while the Brazilian company’s output is pegged at 3,00,000 tonnes. strategic fitThe acquisition is a strategic fit as Brazil is the largest producer and exporter of sugar while India is the largest consumer of sugar in the world, said an analyst. The acquisition provides Renuka Sugars an opportunity to tap the Brazilian markets and fuel its plans to grow and expand production base in the Centre-South region of Brazil, he added. Renuka Sugars in September acquired five per cent stake in NCDEX, the national commodity exchange, for Rs 36 crore. Shree Renuka to add refining capacity Shree Renuka Sugars buys 87% stake in Gokak Sugars More Stories on : Sugar | Mergers & Acquisitions | Overseas Investments
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