Biosev, Brazil Unit Of Louis Dreyfus, Suspends IPO Plans
07/19/2012| 11:50am US/Eastern
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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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