Cosan Logistics Unit Seeks Equity Investor

Rumo Logistica, the logistics unit 71% held by Cosan, is looking to for an equity investment worth some BRL1.2bn to help it expand its network. “Ideally, we’d look to target funds and investors that invest in infrastructure,” says a company official who asks not to be identified. Cosan has hired Credit Suisse to advise Rumo on the auction process, for which a due date for bids has not yet been set. Cosan values Rumo – which owns 2 port terminal facilities – at some BRL910m, with Cosan’s stake worth around BRL650m, says the official, adding that the figures err on the conservative side. Cosan says its unit is to be financially self sufficient, and that the sugar giant does not plan to capitalize or extend intercompany debt. Rumo is looking to execute a 3-part investment, including BRL535m to expand its Bauru-Santos rail capacity in the state of Sao Paulo; BRL435m to acquire up to 79 new engines and 1,108 new cars; and BRL206m to expand port terminals. Rumo’s 2 existing adjoining ports are soon likely to have a combined annual freight capacity of 15m tons, says the official. The company official says now is a good time to invest in Brazilian sugar since share prices are depressed, but sugar prices are heading north following 2 years of decline. Elsewhere in the sector, SantelisaVale is up for sale after having taken on too much debt, while CNAA is pushing ahead with its business plan following a $275m equity capital injection from Carlyle-Riverstone and a $145m 15-year IDB A loan at Libor plus 450bp. BNDES is expected to extend more debt financing to CNAA this year.