By Rogerio Jelmayer
SAO PAULO--Fibria Celulose SA (FIBR3.BR, FBR) and Suzano Papel e
Celulose SA (SUZB5.BR), Brazil's largest paper and pulp companies
in terms of revenues, are selling stakes in noncore assets as part
of efforts to reduce debts.
Suzano will sell its 17.9% stake in energy consortium Capim
Branco Energia for 320 million Brazilian reais ($157 million), it
said in a statement over the weekend.
Suzano controls Capim Branco Energia through a consortium with
Minas Gerais-run power utility company Cemig SA (CIG, CIGC,
CMIG4.BR) with a 21.1% stake, mining titan Vale SA (VALE) with a
48.4% stake, and industrial conglomerate Votorantim, which has a
12.6% stake.
In recent quarters, Brazil's pulp-and-paper companies have
posted tepid performances as the global crisis reduced pulp prices
across the globe, affecting companies' cash generation.
"The divestment of Suzano's interest in the Consortium is an
important measure that is part of the package to shield the
finances of the company," Suzano said in the statement.
It added that Cemig accepted the offer to acquire its share of
Suzano's 17.9% stake, and informed of its intention to acquire any
leftover interest if the other consortium members don't exercise
their respective rights of first offer.
Suzano's net debt in the third quarter was 4.7 times its
earnings before interest, taxes, depreciation and amortization, or
Ebitda, compared to 4.1 times in the same period a year
earlier.
The company expects its debt-to-Ebitda ratio to rise further
before peaking next year and starting to drop in 2014, with the
sale of some assets and the start of production of a pulp unit in
Maranhao state at the end of 2013.
Fibria also announced the sale of the Losango rainforest
project, located in the Brazilian state of Rio Grande do Sul, to
Chilean paper and wood pulp producer Empresas CMPC SA (CMPC.SN) for
BRL615 million.
Earlier this year, Fibria and Suzano raised BRL1.44 billion and
BRL1.43 billion respectively from shares offers, as part of efforts
to pay off a portion of their debts.
Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com
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