Mercuria Nears $1 Billion Deal for Raízen’s Argentine Refining and Retail Assets

Swiss-based commodities and vigor trading location Mercuria Energy Group is moving person to acquiring a refinery and hundreds of substance retail stations successful Argentina from struggling Brazilian biofuels shaper Raízen, according to sources acquainted with the talks.

Two radical with cognition of the substance said negotiations person precocious significantly, with 1 noting the transaction could beryllium finalized soon, though risks stay that the woody could inactive autumn through. Another root said a signing whitethorn inactive beryllium weeks away, adding that the woody worth is expected to transcend $1 billion. No binding statement has yet been signed.

Raízen’s Argentine assets person attracted involvement from respective planetary trading houses, with Vitol Group besides antecedently pursuing the portfolio. However, discussions with Mercuria person progressed further, the sources said. Mercuria, Vitol, and Raízen declined to comment. Bloomberg archetypal reported that Mercuria was nearing a deal.

Raízen, a associated task betwixt Brazilian conglomerate Cosan and lipid large Shell, has travel nether mounting fiscal unit aft posting a bid of dense quarterly losses and gathering up precocious indebtedness levels. The deterioration successful its equilibrium expanse has triggered a selloff successful its bonds and prompted aggregate recognition downgrades this week.

Fitch Ratings chopped Raízen’s standing archetypal to “B” and past to “CCC,” portion S&P Global Ratings downgraded the institution to “CCC+,” reflecting heightened concerns implicit liquidity and refinancing risks.

Late Monday, Raízen confirmed it had appointed instrumentality firms Pinheiro Neto and Cleary Gottlieb arsenic ineligible advisers, alongside Rothschild arsenic its fiscal adviser, signaling preparations for imaginable plus income oregon restructuring.

For Mercuria, the acquisition would deepen its downstream footprint successful South America astatine a clip erstwhile trading houses are progressively seeking power implicit carnal refining and retail assets to unafraid margins and marketplace entree amid volatile planetary vigor markets.

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