Brazil sugar group Clealco refinances nearly 1 bln reais in debt

Banco Bradesco

19/08/2017 19:16

By Marcelo Teixeira and Tatiana Bautzer 
    SAO PAULO, Aug 19 (Reuters) - Brazilian sugar group Clealco 
Açúcar e Álcool SA reached a deal with banks late on Friday to 
refinance almost 1 billion reais ($317 million) in debt, three 
people with knowledge of the operation said, and a company 
executive confirmed the deal. 
    The refinancing deal reduced Clealco's short-term debt to 5 
percent of the total from 75 percent previously as the 
maturities have been extended, the sources said.  
    Itaú Unibanco Holding SA  ITUB4.SA , Banco do Brasil SA 
 BBAS3.SA , Banco Votorantim SA, Banco Santander Brasil SA 
 SANB11.SA , Banco Bradesco SA  BBDC4.SA , Banco ABC Brasil SA 
 ABCB4.SA  and the Brazilian unit of Cooperative Rabobank UA 
have extended maturities by up to 7 years and agreed to grace 
periods of up to two years.  
    Most of the companys debt will mature from 2022 to 2024, 
and Clealco will be exempt from paying interest and principal 
for one to two years, depending on the creditor. 
    Clealco director Gabriel Carvalho said the new terms will 
give the company a stronger capital structure. 
    The banks did not respond to requests for comment on 
Saturday. Financial advisory firm Pantalica Partners assisted 
Clealco in the restructuring, Carvalho said.   
    Since 2010, many Brazilian sugar companies have filed for 
bankruptcy protection or closed doors. Years of artificially low 
gasoline prices in Brazil squeezed ethanol profit margins and a 
long period of depressed sugar prices hurt their finances.  
    Clealco owns three sugar mills in the main Sao Paulo cane 
belt, with capacity to process around 10 million tonnes of cane 
per crop. Its Queiroz mill, built in 2006, is one of the largest 
 sugar producing installations in the country. 
    "The restructuring will adjust the company's capital 
structure and bring cash generation to appropriate levels," 
Clealco's Carvalho said.  
    The director said the company agreed to reduce debt levels 
through asset sales such as agricultural land. "The banks agreed 
to refinance because they saw the recovery potential", Carvalho 
added. 
    ($1 = 3.1462 reais) 
 
 (Additional reporting by Guillermo Parra-Bernal; editing by 
Diane Craft) 
 ((tatiana.bautzer@tr.com; Tel: +55-11-5644-7756; Mob: 
+55-119-4210-4173; Reuters Messaging: 
tatiana.bautzer.thomsonreuters.com@reuters.net)) 
 
Keywords: CLEALCO RESTRUCTURING/