Petrobras in talks with ethanol producer
Petrobras, Brazil’s largest oil company, is in talks about the possible purchase of a controlling stake in Brenco, a Brazilian ethanol producer backed by venture capitalist Vinod Khosla and America Online (AOL) founder Steve Case.
Brenco was reported to be considering the offer alongside two others, including one proposing a merger with ETH Bioenergia, an ethanol producer controlled by Brazilian industrial conglomerate Odebrecht.
There have been a number of mergers and acquisitions in Brazil among ethanol producers that took on large amounts of debt to finance expansion. Brenco had planned to invest 5.5 billion reais (€2.1 billion) to become one of the biggest ethanol producers in Brazil, producing 1 billion US gallons of ethanol every year. When it found itself unable to raise this capital, it fell into severe financial difficulties.
Petrobras announced in Q1 2008 plans to invest in ethanol production by taking minority stakes in 40 different plants and exporting the ethanol to Japan. It has not yet made significant progress towards this goal.
The company, which said in June it had plans to buy an existing mill by the end of 2009, is currently building a plant in partnership with Japanese trading company Mitsui.
Brenco was reported to be considering the offer alongside two others, including one proposing a merger with ETH Bioenergia, an ethanol producer controlled by Brazilian industrial conglomerate Odebrecht.
There have been a number of mergers and acquisitions in Brazil among ethanol producers that took on large amounts of debt to finance expansion. Brenco had planned to invest 5.5 billion reais (€2.1 billion) to become one of the biggest ethanol producers in Brazil, producing 1 billion US gallons of ethanol every year. When it found itself unable to raise this capital, it fell into severe financial difficulties.
Petrobras announced in Q1 2008 plans to invest in ethanol production by taking minority stakes in 40 different plants and exporting the ethanol to Japan. It has not yet made significant progress towards this goal.
The company, which said in June it had plans to buy an existing mill by the end of 2009, is currently building a plant in partnership with Japanese trading company Mitsui.
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