CNAA Revamps Sugar Financing

Brazilian sugar and ethanol startup CNAA has reworked an ambitious $630m financing plan in response to deteriorating market conditions, an executive close to the company tells LatinFinance. The project originally involved three loans: a $120m 7-year pre-export facility from Bradesco, Santander and Banco Espirito Santo; a BRL450m 15-year IDB A loan to be disbursed in two stages, and a BRL440m 13-year syndicated B loan. The pre-export facility was quoted last May at Libor plus 275bp and CNAA was targeting a spread of 300bp-350bp for the A/B loans, though pricing may have risen on the A loan to reflect changing markets. The B loan option has been scrapped entirely, a decision made when the credit crunch took a turn for the worse last year. To partially fill the void left by the missing syndication, Carlyle Riverstone (CR), the US-based energy-focused private equity fund raised its stake in CNAA through a $275m capital commitment, to be disbursed in small portions. The injection boosts its majority stake in CNAA and dilutes the remaining participants. CNAA is owned by a consortium led by CR, Goldman Sachs, Santelisa Vale and Global Foods. The loan plus equity totals some $586m equivalent. CNAA has also tapped BNDES for a BRL550m loan to help finance the company’s third sugar mill, which has yet to go onstream. Proceeds from all facilities are for capex supporting a steep ramp up in production. The company’s first two mills are already operational, and should crush some 2m tons of sugarcane this year, says the executive close to the company. Both are equipped with co-gen facilities that are set to produce an excess of 40MW of power, which has already been sold to offtakers Enertrade and AES.