MUMBAI: Shree Renuka Sugars, one of the leading sugar producers and the largest sugar refiner in the country, on Sunday said is is acquiring a 51% stake in Brazil's Equipav SA Acucar Alcool for Rs 1,530 crore ($329 million). With a debt of about Rs 3,821 crore ($822 million), the enterprise value of the deal is nearly $1.2 billion. Equipav is one of the largest sugar producers in Brazil.
The $1-billion-plus transaction value makes it the largest deal by an Indian sugar producer. The second biggest deal in the sugar space — that of a $240-million buyout of Brazilian sugar and ethanol maker Vale Do Ivai in November 2009 — was also by Renuka Sugars. The two deals together will partly meet the need of raw sugar for its two refining capacities, the already commissioned plant in Haldia in West Bengal, and its upcoming plant in Mundra, Gujarat, said Gautam Watve, head-strategy & planning, Shree Renuka Sugars.
The Indian sugar producer clinched the deal in a field of five bidders which included Noble group from China, part owned by the Chinese government, and Bungee from the US. After the deal, the balance equity in the unlisted Equipav will be held by its current promoters but top officials at the Indian company said it was willing to raise its stake if any opportunity comes. The deal is expected to be closed in about 40 days, K K Kumbhat, chief financial officer, Shree Renuka Sugars, told reporters here.
Company officials said that the deal amount, whcih is Rs 1,530 crore, is being financed through three channels. The company had raised about Rs 500 crore through a QIP issue last year. The promoters of the company are also pumping in about Rs 185 crore for an preferential allotment this week. The balance amount, about Rs 800 crore, will come from internal accruals, Kumbhat said.
Of the total money being infused into the company, apprximately Rs 500 will go towards repayment of Equipav's debt, another Rs 500 crore to meet its working capital needs and the balance for capital expenditure.
After the consummation of the deal, Renuka Sugars will have a total sugar cane crushing capacity of 115,000 tonnes cane per day (TCD), with about half the capacity coming from its latest buyout in Brazil, the world's largest sugar producing country. Company officials said that together with Vale Do Ivai, Equipav will give Renuka Sugars the opportunity to tap the global market.
The $1-billion-plus transaction value makes it the largest deal by an Indian sugar producer. The second biggest deal in the sugar space — that of a $240-million buyout of Brazilian sugar and ethanol maker Vale Do Ivai in November 2009 — was also by Renuka Sugars. The two deals together will partly meet the need of raw sugar for its two refining capacities, the already commissioned plant in Haldia in West Bengal, and its upcoming plant in Mundra, Gujarat, said Gautam Watve, head-strategy & planning, Shree Renuka Sugars.
The Indian sugar producer clinched the deal in a field of five bidders which included Noble group from China, part owned by the Chinese government, and Bungee from the US. After the deal, the balance equity in the unlisted Equipav will be held by its current promoters but top officials at the Indian company said it was willing to raise its stake if any opportunity comes. The deal is expected to be closed in about 40 days, K K Kumbhat, chief financial officer, Shree Renuka Sugars, told reporters here.
Company officials said that the deal amount, whcih is Rs 1,530 crore, is being financed through three channels. The company had raised about Rs 500 crore through a QIP issue last year. The promoters of the company are also pumping in about Rs 185 crore for an preferential allotment this week. The balance amount, about Rs 800 crore, will come from internal accruals, Kumbhat said.
Of the total money being infused into the company, apprximately Rs 500 will go towards repayment of Equipav's debt, another Rs 500 crore to meet its working capital needs and the balance for capital expenditure.
After the consummation of the deal, Renuka Sugars will have a total sugar cane crushing capacity of 115,000 tonnes cane per day (TCD), with about half the capacity coming from its latest buyout in Brazil, the world's largest sugar producing country. Company officials said that together with Vale Do Ivai, Equipav will give Renuka Sugars the opportunity to tap the global market.
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