Cosan Brings Bank Credits, Share Sale

Brazil’s Cosan plans to raise BRL880m through a share offer to existing shareholders, it says, and obtain $800m in credit facilities from Bradesco. The share subscription funds will be used for expansion plans, CFO Paulo Diniz says on a call with investors. The credit facilities can be tapped if needed to help finance last year’s purchase of Esso assets in Brazil. Diniz says the sugar and ethanol producer is taking action because Cosan “may have some delays to get permanent financing” given the state of the markets. The Cosan SA unit will issue 55m common shares available to current holders until October 22. The Cosan Ltd unit, the majority holder in Cosan SA, will buy any shares remaining after the subscription period. The credit package consists of a $500m standby facility from Bradesco and a $300m pre-export credit facility. Cosan SA shares closed at BRL15.50 Monday, down from a previous close of BRL16.22.