Indian group officializes acquisition of Equipav
O Estado de S. Paulo
After a long negotiation that has taken more than four months, Indian Shree Renuka Sugars wrapped up the acquisition of Brazilian Equipav Açúcar e Álcool, which has two sugar and alcohol units in the São Paulo cities of Promissão and Brejo Alegre. Unlike the agreement entered into in February between the two companies, Shree Renuka will take over 50.34% of Equipav, compared to a 50.79% slice that was foreseen, and it will pay R$ 450 million (US$ 250 million), or R$ 150 million (US$ 83.3 million) less than the R$ 600 million (US$ 333.3 million) announced before.
The difference between the value foreseen and that that was effectively paid, besides the disagreement among the Brazilian shareholders of Equipav, almost prevented the closing of the deal, announced yesterday by the company in an announcement at the Mumbai Stock Exchange, where it is listed. The Indians claimed the price announced in February reflected a sugar traded at nearly 30 cents per pound, while the current value is at nearly 15 cents. In early June, when the final agreement was signed, one of the shareholders of Equipav - the families Toledo, Vetorazzo and Tarallo - backed off. After further negotiations, the document was finally executed by the legal representatives of the Indian company in the country and yesterday, the President of Shree Renuka, Narendra Murkumbi, ratified it.
According to the announcement of Shree Renuka, the value of Equipav amounts to R$ 2.064 billion (US$ 1.1 billion). The two plants have capacity to process 10.5 million tons of sugar cane per harvest, and produce 203 MW of cogenerated power. Shree Renuka foresees investing R$ 218 million (US$ 121.1 million) to increase the processing capacity to 12 million tons of sugar cane and produce 295 MW of energy. "The funds will finance investments, partially paying debts and increasing the working capital. The rest of the debt will be paid over a period of 10 years", said the company in an announcement.