Renuka Sugars buys Brazil co.

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.