Brazil Sao Martinho negotiates controlling stake in Santa Cruz sugar, ethanol mill - report

Dec 11, 2012 - Brazilian sugar and ethanol maker Sao Martinho (SAO:SMTO3) seeks to boost its stake in local sugar and ethanol mill Santa Cruz to 87.5% from the current 32.18%, the company's investor relations manager, Felipe Vicchiato, was quoted as saying by Brazilian daily Valor Economico yesterday.
Sao Martinho is reportedly in talks to purchase the 55.31% interest of Luiz Ometto Participacoes and the negotiations are seen to be concluded within the next 12 months.
According to Vicchiato, Sao Martinho needs to take control over the mill so that it can achieve operating synergies.
Last year, Sao Martinho bought its current stake in Santa Cruz for BRL 55.5 million (USD 26.7m/EUR 20.6m). It also paid BRL 131.9 million for the acquisition of 32.5% in Agropecuaria Boa Vista, owner of the plot where Santa Cruz is located. Now Sao Martinho is negotiating the exchange of this land for the stake of Luiz Ometto Participacoes in the mill, the investor relations manager told Valor.
If Sao Martinho manages to close the deal, it will gain additional sugar cane crushing capacity of 3 million tonnes, thus reaching a processed sugar cane volume of 19.5 million tonnes in the 2014/2015 crop year. This, in turn, would lift the company's net revenue to BRL 2.4 billion, the daily also wrote citing Vicchiato.

(BRL 1 = USD 0.481/EUR 0.372)

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