Shree Renuka to buy Brazil firm for Rs 1,530 cr

Shree Renuka Sugars Ltd on Thursday announced that it has entered into definitive agreements with Brazilian company, Grupo Equipav for an investment of Rs 1,530-crore ($329 million) to acquire a controlling stake of 51 per cent, a top company official said in Mumbai.

Shree Renuka Sugars Ltd on Thursday announced that it has entered into definitive agreements with Brazilian company, Grupo Equipav for an investment of Rs 1,530-crore ($329 million) to acquire a controlling stake of 51 per cent, a top company official said in Mumbai.

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"We have entered into definitive agreement with Brazil-based, Grupo Equipav for an investment of Rs 1,530 crore leading to a majority controlling stake of 51 per cent. Equipav is one of the largest sugar/ ethanol companies in Brazil," Shree Renuka Sugars chairperson Vidhya Murkumbi told reporters here.

The Brazilian company consist of two very large and modern sugar/ethanol mills with integrated co-generation facilities in Sao Paulo state in Southeast Brazil, with a combined cane crushing capacity of 10.5 million tonnes of cane per annum.

Shree Renuka Sugars will achieve a majority stake of 50.79 per cent by May 2009 and the balance stake in the venture would be held by the founding Equipav group.

The acquisition will be financed through Rs 500-crore raised by the company through QIP last year and Rs 185 crore from conversion of warrants into equity. The balance amount will come from internal accruals only and is has no plans for borrowing, Murkhumbi said.

"This investment brings us closer to building a global sugar and ethanol business combining the most cost-efficient and scalable production areas in the world along with a leading presence in the largest ethanol and sugar markets of the world," Shree Renuka Sugars managing director, Narendra Murkumbi said.