Bunge Limited to Expand Sugar and Bioenergy Business in Brazil
December 24 2009 - 6:30AM
PR Newswire (US)
WHITE PLAINS, N.Y., Dec. 24 /PRNewswire-FirstCall/ -- Bunge Limited
("Bunge") (NYSE:BG) today announced that it has entered into an
agreement to become the 100% owner of Usina Moema Participacoes
S.A. ("Moema Par"). Moema Par is a holding company that wholly owns
one sugarcane mill in Brazil and has ownership interests in five
others. Together, the cluster of six mills ("Moema Group") has an
annual crushing capacity of 15.4 million metric tons. With this
transaction, Bunge will have a 60% effective share of the total
capacity, representing Moema Par's wholly owned mill and its
interests in four of the five other mills. The transaction will be
structured as a share exchange, and under the terms of the
agreement, shareholders in Moema Par will be entitled to receive
approximately 7.3 million common shares of Bunge Limited, which
includes a payment of approximately $36 million in respect of
working capital. Based on yesterday's closing price of Bunge's
common shares, the value of the transaction is approximately $896
million, including approximately $480 million of net debt and
excluding this working capital amount. The final number of shares
to be issued will be based on the amount of net indebtedness and
working capital of Moema Par at closing. In the coming weeks, Bunge
may enter into agreements to secure some or all of the remaining
interests in the mills that constitute the Moema Group. These
transactions would be on economic terms consistent with the Moema
Par transaction. If, in addition to completing the Moema Par
transaction, Bunge secures 100% of the remaining outstanding
interests in the Moema Group mills, shareholders in Moema Par and
other shareholders in the mills would receive a total of
approximately 13.4 million common shares of Bunge Limited, which
includes a payment of approximately $60 million in respect of
working capital. Based on yesterday's closing price of Bunge's
common shares, the total value of all transactions would be
approximately $1.48 billion, including approximately $710 million
in net debt and excluding this working capital amount, subject to
adjustment as described above. Bunge expects that all of these
transactions would be accretive to earnings per share in the first
12 months. "This transaction fulfills Bunge's strategic goal of
building a large-scale, fully integrated business in sugar and
bioenergy," stated Alberto Weisser, Chairman and CEO of Bunge
Limited. "It adds significant scale to our current milling
operations and enables us to vary production among multiple sugar
and ethanol products, according to market conditions. The Moema
Group cluster is also strategically located near large domestic
markets in Brazil and has excellent access to export logistics
systems. All of these strengths make it a perfect fit with our
global trading and marketing operations." The Moema Group cluster
is located on the border of São Paulo and Minas Gerais states, the
two largest domestic ethanol markets in Brazil. The mills benefit
from cost savings due to their cluster configuration, and have
favorable road and rail access to three of Brazil's largest export
ports (Santos, Paranagua and Vitoria). The cluster can produce two
types of sugar (raw and crystal) and two types of ethanol (hydrous
and anhydrous). It has co-generation facilities, is self-sustaining
in terms of energy requirements and sells excess power to the grid.
A majority of the cluster's sugarcane is harvested mechanically,
and the topography of the region should ultimately allow for
approximately 95% mechanization. "For sugar and bioenergy, Brazil
is an ideal location in which to invest," continued Weisser. "It
has a fast-growing domestic market for ethanol and, because it
boasts the world's lowest-cost production, is well-positioned to
expand its exports of both sugar and ethanol. Bunge is pleased to
build on its commitment to the economy and people of Brazil." Bunge
Limited has agreed to file a registration statement for the common
shares issued to the new shareholders, which will allow the
shareholders to resell their common shares from time to time. In
addition, the shareholders participating in the transactions have
agreed, during the 18 month period after the closing, to certain
volume and other restrictions with respect to sales of their common
shares. The closing of the transaction announced today is expected
to occur within the next 45 days, subject to certain conditions,
including reaching satisfactory agreements with the shareholders in
the Moema Group mills not wholly owned by Moema Par. Credit Suisse
AG is serving as financial advisor to Bunge, and Itau-BBA is
serving as financial advisor to the Moema Par shareholders.
Additional Information A slide package providing additional
information will be posted on Bunge Limited's website in the
Investor Relations section at http://www.bunge.com/. About Bunge
Limited Bunge Limited (http://www.bunge.com/, NYSE: BG) is a
leading global agribusiness and food company founded in 1818 and
headquartered in White Plains, New York. Bunge's 25,000 employees
in over 30 countries enhance lives by improving the global
agribusiness and food production chain. The company supplies
fertilizer to farmers; originates, transports and processes
oilseeds, grains and other agricultural commodities; produces food
products for commercial customers and consumers; and supplies raw
materials and services to the biofuels industry. Cautionary
Statement Concerning Forward-Looking Statements This press release
contains both historical and forward-looking statements. All
statements, other than statements of historical fact are, or may be
deemed to be, forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are not based on historical facts, but
rather reflect our current expectations and projections about our
future results, performance, prospects and opportunities. We have
tried to identify these forward-looking statements by using words
including "may," "will," "should," "could," "expect," "anticipate,"
"believe," "plan," "intend," "estimate," "continue" and similar
expressions. These forward-looking statements are subject to a
number of risks, uncertainties and other factors that could cause
our actual results, performance, prospects or opportunities to
differ materially from those expressed in, or implied by, these
forward-looking statements. The following important factors, among
others, could affect our business and financial performance:
industry conditions, including fluctuations in supply, demand and
prices for agricultural commodities and other raw materials and
products used in our business, fluctuations in energy and freight
costs and competitive developments in our industries; the effects
of weather conditions and the outbreak of crop and animal disease
on our business; global and regional agricultural, economic,
financial and commodities market, political, social and health
conditions; the outcome of pending regulatory and legal
proceedings; our ability to complete, integrate and benefit from
acquisitions, including the transactions discussed in this news
release, dispositions, joint ventures and strategic alliances;
changes in government policies, laws and regulations affecting our
business, including agricultural and trade policies, tax
regulations and biofuels legislation; and other factors affecting
our business generally. The forward-looking statements included in
this release are made only as of the date of this release, and
except as otherwise required by federal securities law, we do not
have any obligation to publicly update or revise any
forward-looking statements to reflect subsequent events or
circumstances. DATASOURCE: Bunge Limited CONTACT: Investors, Mark
Haden, +1-914-684-3398, , or Media, Susan Burns, +1-914-684-3246, ,
both of Bunge Limited Web Site: http://www.bunge.com/
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