Shares of sugar and ethanol producer Cosan (CZZ, CSAN3.BR) were among relatively few gainers on Brazil's stock market late in Wednesday's session, as the company's plans to acquire a local natural-gas distributor took a step forward.

Cosan said in a regulatory filing late Tuesday that it plans to sell 3.3 billion Brazilian reais ($1.69 billion) in debentures to finance its tentative purchase of a 60.1% stake in Companhia de Gas de Sao Paulo (CGAS5.BR, CGAS3.BR), or Comgas, from the U.K.'s BG Group PLC (BRGYY, BG.LN).

A Cosan official confirmed that the debt, which would mature in eight years, would be sold in a private placement to local banks Itau Unibanco Holding S/A (ITUB, ITUB3.BR, ITUB4.BR) and Banco Bradesco S/A (BBD, BBDO, BBDC4.BR). The company didn't disclose further terms of the deal.

Cosan had confirmed in April that it was in talks with BG Group to buy Comgas but said at the time that nothing had been formally decided between the companies. Cosan's shares recently traded 0.7% higher at BRL32.91, while the thinly traded shares of Comgas were up 1.5% at BRL45.29.

The world's biggest sugarcane crusher, Cosan has sought in recent years to increase the scope of its energy business, built around the production of ethanol fuel. Last year the firm formed an ethanol joint venture, dubbed Raizen, with Royal Dutch Shell PLC (RDSA, RDSA.LN), which also owns a stake in Comgas.

Brazil's 2012-13 sugarcane harvest started up last month. The company official said Cosan began crushing sugarcane on April 24, adding that "the large majority" of the firm's 24 sugar and ethanol mills are now in operation.

-By Paul Kiernan, Dow Jones Newswires; (+55)11-3544-7074, paul.kiernan@dowjones.com

Cosan Limiited (NYSE:CZZ)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Cosan Limiited Charts.
Cosan Limiited (NYSE:CZZ)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Cosan Limiited Charts.