Brazil’s Raizen mulls asset sales and partnerships to boost growth

(Reuters) – Brazilian energy company Raizen Energia SA (RAIZ4.SA) is mulling divestment opportunities and strategic partnerships to drive growth across its business units, company executives said on Wednesday.

Raizen, a joint-venture between Shell PLC (SHEL.L) and Cosan (CSAN3.SA), has many assets that could be monetized through sales or partnerships, its CEO Ricardo Mussa said during a meeting with investors and analysts.

No specific target has been set for this “portfolio recycling” plan, said Mussa, pondering that any deal would be carried out “with great rigor” without affecting the company’s long-term strategy.

Mussa said the scale of divestments would depend on various factors, such as this year’s sugarcane harvest in Brazil, which has been performing “better than expected.”

The firm, who operates in the sugar and ethanol sector, besides being one of the largest fuel distributors in Brazil, may now seek partners for Raizen Power, a recently launched business unit focused on the electricity sector.

The new unit seeks to be a leading provider of electric power and decarbonization solutions, with a goal of reaching 6 million customers and tripling its earnings before interest, taxes, depreciation and amortization.

The timeline for achieving these goals, however, would depend on regulatory advances, said the firm’s head for energy and renewables, Frederico Saliba.

Regarding sugar, Mussa said prices need to be at structurally high levels, above 22 or 23 cents per lb, to justify investments to increase its production capacity.

“It will take some time, we will only make a decision to invest more in sugar if we see that this horizon is steady for a longer time,” he said.

July raw sugar settled down 1.2%, at 25.49 cents per lb on Wednesday.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Powered by

Up ↑