Cosan increases debt transfer to Raizen

Cosan, one of Brazil’s largest producers of ethanol, said it will boost the amount of debt being transferred to the new joint venture company with Royal Dutch Shell, Raizen. Raizen began operations on June 1, 2011.  Cosan had previously announced the debt transfer to be 4.61 billion reais (US$2.92 billion) but a recent spike in sugar prices have caused the company to up the debt transfer to 5.24 billion reais (US$3.3 billion).  Marcelo Martins, financial vice president for Cosan, said, “There was an agreement that, depending on prices, the debt’s value could change.”  Cosan has transferred all of its sugar and ethanol mills, in addition to energy-generation operations into the 50-50 joint venture with Shell.  Cosan has retained its lubricant business, logistic company, retail sugar business and real estate company. Raizen is expected to have annual sales of US$30 billion and to produce approximately US$2 billion in savings for the joint partners. The new company will be the world’s largest sugar and ethanol producer.  Rubens Ometto, the current board chairman for Cosan, will also be Raizen’s chairman.  Brazilian antitrust regulators are still reviewing the joint venture. (June 2-3, 2011)