Czarnikow, the UK’s second oldest sugar trader, has advised Rio Vermelho, a Brazilian ethanol producer, on Glencore’s acquisition of a 76 per cent equity participation.
The deal value was greater than USD80m.
Czarnikow, through its corporate finance division, was the sole adviser to Rio Vermelho, which is located in the São Paulo region.
The investment is Glencore’s first in to the sugar/ethanol sector. The funds will be used to expand the mill’s crushing capacity to reach its full potential by building a new sugar plant.
The deal will also allow the Garieri family, the former controlling shareholder, to sell the remaining 24 per cent stake to Glencore within two years. The Garieri family has decided to concentrate on its farming activities.
Tiago Medeiros, a divisional director of Czarnikow, says: “We are glad to have assisted the Garieri family on its partnership with Glencore, which will provide the cash requirements and expertise to more than double Rio Vermelho’s crushing capacity. Soaring demand for sugar globally and ethanol regionally, will increase the need for capital investment in Brazil, which will mean that the consolidation process in the industry will be driven by the large corporations instead of family groups.”
