An agreement has been reached for new capitalization and debt renegotiation

Odebrecht Agroindustrial has completed the process of capital restructuring.

05/07/2016

Odebrecht Agro industrial has finished its capital restructuring process, a clear indication of the trust from the Odebrecht Group in the Business and the primary role of ethanol as a renewable source for the Brazilian energy matrix.

The process includes capitalization from Odebrecht S.A.in Odebrecht Agroindustrial to the approximate value of R$6 billion, of which R$2 billion will be made through a transfer of assets and R$4 billion through financial attributions. Of the latter, R$2.5 billion will be ring-fenced exclusively for the immediate reduction in the company's debt, which will strongly diminish its exposure. "The operation will allow Odebrecht Agroindustrial to reinforce its commitments in the sector, continually increasing our milling of sugarcane, enhancing our industrial and production capacity and, consequently, guaranteeing the maintenance of our 12,000 Staff members, their families and the community", states Luiz de Mendonça, president of Odebrecht Agroindustrial.

"This operation will permit, besides the reduction in leverage indices, the adjustment of our financial deadlines with the capacity to generate a healthy cash flow for the company, through and extension of the debt over 13 years, which will reinforce our financial well-being", says Alexandre Perazzo, Financial Director at Odebrecht Agroindustrial.

This injection will be given in spite of the serious economic crisis faced by the country and the sugar-energy, one of the worst in history, as well as the political and governmental situation over the last few years, not least the withdrawal of the CIDE (Contribution for Intervention on the Economic Domain) and the fuel price controls. Moreover, it will help Brazil to meet the goals set out in the agreement during COP-21, to increase the share of renewable fuels in the global economy. 

"The Odebrecht Group has always believed in the importance of the sector and its recovery over the long-term. Over the last few years the stockholders have made important movements to allow for the maintenance of investments of the company in a scenario of crisis in the sector and that will help to reestablish our financial equilibrium", affirms Mendonça.

The company has demonstrated growth in its operational performance. In the 2015/2016 harvest, it reached a record volume of milling of 29.2 million tons of sugarcane, representing a growth of more than 20%. In the current cycle, Odebrecht Agroindustrial hopes to hit the target of 31 million tons milled, with the production of 2.1 million liters of ethanol and 630,000 tons of sugar.

Odebrecht Agro industrial is today the second largest producer of ethanol in Brazil and the third-largest group in the sector in terms of milling capacity. It works in four Brazilian states (São Paulo, Mato Grosso, Goiás and Mato Grosso do Sul) and generates over 12,000 direct jobs and investments of more than R$20 million spread over 70 social projects aimed at improving the life and income of the communities in which it operates.