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Brazilian biofuel producer Raízen wants to raise $ 1.34 billion in IPO – News

The joint venture between Royal Dutch Shell and Cosan, an energy conglomerate that produces sugarcane-derived biofuels, has reached Real 6.9 billion (1.34 billion) through a stock market listing that has been ranked as one of Brazil’s largest so far this year. I’m trying to raise a dollar).

Founded 10 years ago, Raízen is Brazil’s fourth-largest company in terms of sales, with approximately 30,000 employees.

In a securities filing on Wednesday, he said he would sell about 8% of the shares through an initial public offering on the B3 Stock Exchange in Sao Paulo.

According to those familiar with the matter, the reference price range for stocks ranges from R $ 7.4 to R $ 9.6, which raises the valuation of a company from about R $ 70 billion to R $ 100 billion. Become.

If successful, it will be in the top 10 IPOs recorded in Brazil.

Raízen operates a network of gas stations that convert sugar cane to ethanol for the automotive and other industries, sell traditional fuels and operate renewable energy equipment. We also take pride in being one of the largest sugar exporters in the international market.

As the climate emergency surrounds the money manager’s agenda, Reisen’s list tests investors’ enthusiasm for the transition from fossil fuels to cleaner energy.

Raizen will spend its revenue (equivalent to 6.9 billion reals in the middle of the price range) on projects that include “second generation” ethanol production, a technology that enables the conversion of industrial waste into biofuels.

“We, [sugarcane] Roberto Musa, CEO, said in an interview before the company announced its intention to emerge. “With second-generation ethanol, we can produce 50% more without additional acreage.”

Raízen generated R $ 114.6 billion in revenue for the year ending March 31 and generated R $ 6.6 billion ($ 1.3 billion) in interest, taxes, depreciation and amortization.

“Looking at today’s core business, in addition to the distribution of gasoline, ethanol and diesel, the sale of ethanol and sugar. Other areas are much smaller but growing,” said asset manager Iridium Gestão. Says Obede Rodrigues, Portfolio Manager at.

Ethanol emits far less greenhouse gases when burned than its traditional equivalents and is mixed with diesel or gasoline in some countries. Ryzen also sells as a raw material for plastics, beverages, cosmetics and pharmaceuticals.

Ethanol, promoted by the former Brazilian military government after the oil crisis of the 1970s, is Brazil’s main industry, where most new cars can run on both gasoline and biofuels.

This country is the second largest ethanol producer after the United States, where corn is the main raw material.

However, Concerns The use of crops and trees as an energy source will compete with local food production.

Analysts predict that ethanol will play a greater role as a transition fuel in certain countries, either because the government is trying to reduce emissions from motor engines or prior to the widespread use of electric vehicles.

India recently set a goal for gasoline containing 20% ​​mixed ethanol by 2025. According to IHS Markit, the global ethanol market is projected to grow at an average annual growth rate of approximately 2.7% between 2020 and 2025.

Ryzen IPO boom In Brazil, companies are using more and more domestic retail investors to fund public equities. Other debuts this year include the iron ore unit of steel maker CSN, insurance company Caixa Seguridade, and laser hair removal company Espacolaser.

Source link Brazilian biofuel producer Raízen wants to raise $ 1.34 billion in IPO



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