By Rogerio Jelmayer
SAO PAULO--Biosev S.A., the Brazilian sugar-and-ethanol unit of
global commodities powerhouse Louis Dreyfus Holding BV, said
Thursday that it has suspended plans for an initial public
offering, or IPO, of shares due to adverse capital-market
conditions.
The company didn't disclose a timetable for another attempt to
hold its IPO. "We are confident that, when economic conditions are
re-established, new opportunities will emerge for our IPO," said
company Chairman Kenneth Geld in a short email statement.
Earlier Thursday, the company decided to delay the trading debut
of its shares. The company was planning to raise up to 1.14 billion
Brazilian reais ($563 million) from the IPO.
In June, the Brazilian Stock Exchange, or BMFBovespa, saw BRL740
million in outflows from international investors, posting the
second consecutive month of outflows. In May, by comparison, the
exchange posted outflows worth BRL2.3 billion Brazilian, the
highest outflows since December.
According to analysts, recent outflows were driven by investor
pessimism amid a perceived deterioration in Europe's debt
crisis.
Biosev, which evolved from a 2009 merger between LDC Bioenergia
and Santelisa Vale, plans to use 70% of the proceeds of its IPO to
finance expansion and the rest to settle debt. As of March 31, the
firm had short-term liabilities of BRL1.8 billion and long-term
debt of BRL3.67 billion. Total shareholder equity was BRL2.47
billion.
Biosev operates 13 mills in Brazil, the world's top sugar
producer, and has a total crushing capacity of 40 million metric
tons of sugar cane a year.
The company is listing via the Novo Mercado mechanism, which has
the most rigorous rules on the Brazilian Stock Exchange. To
qualify, a company must sell a minimum stake of 25% and all its
shares must be common and not preferred stock.
Banco Bradesco BBI, J.P. Morgan, BB Investimentos, Itau BBA,
Banco Santander and Banco Votorantim are coordinating the planned
IPO.
Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com.
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