Brazil's Cosan Shares Rise On Planned Debt Sale
May 09 2012 - 04:22PM
Dow Jones News
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
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