Former Odebrecht Agroindustrial and third largest ethanol and sugar producer in Brazil, Atvos is expected to be sold for 13 billion reais

Considering the current production of Atvos – formerly Odebrecht Agroindustrial, the group believes that the value of the business varies between 7,3 billion and 13 billion reais.

Atvos – formerly Odebrecht Agroindustrial – is one of the largest sugar-energy groups in Brazil, the company has nine units and a crushing capacity of almost 40 million tons of sugarcane per harvest, the company is also the largest in the sector to face a judicial reorganization. Many job openings to work on Petrobras' FPSO P-50 announced yesterday, March 3rd.

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Assets could be put up for sale soon, depending on the outcome of the company's and its holding company's creditors' meetings. At first, the Odebrecht vote will take place on March 18, while the creditors of sucroenergética will meet on the 27th.

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Company executives believe that the value of the deal should vary between 7,3 billion and 13 billion reais. For the calculation, they considered the company's installed capacity and effective production, in addition to a minimum value of US$ 50 per ton of sugarcane.

However, this level may be higher than that seen in the last sector negotiations. In 2019, for example, Biosev sold two units negotiated at US$ 15 and US$ 29 per ton of cane of installed capacity.

Creditors of Atvos have been asking for changes in the company's control for a long time. Last year, both the Lone Star fund and Castlelake – both company creditors – participated in conversations about the possibility of taking over Atvos.

Now, the requirement came from BNDES – National Bank for Economic and Social Development. O BNDES is the largest creditor of the former Odebrecht Agroindustrial, with more than 4 billion reais to receive.

Atvos hoped to get a period of four to five years to sell the company. Under the new proposal, however, the sale may be requested by the creditor banks at any time after approval of the court-supervised reorganization plan.

An alternative to the sale would be the creation of an equity investment fund (FIP) structure, which could manage Atvos. The objective – both for the sale and for the creation of the FIP – would be precisely to remove Odebrecht from the company's management.

According to sources consulted by Valor, the recovery plan should foresee that half of Atvos' commitments will remain as debt, while the other half will be converted into a hybrid instrument, with no maturity, which will function as a profit-sharing debenture (DPL ).

The conversion of debt into DPL, however, should not happen immediately, being linked to the sale of the company or the creation of the FIP. In both scenarios, according to the report, Odebrecht will keep 10% of the amount attributed to the company's shares.

In the case of a sale, Odebrecht receives it immediately. In the FIP scenario, the holding company would have a 10% right on the future sale. It would also have been established that the company will have a grace period of 2,5 years on interest. This debt service will be added to the total commitment at maturity.

Furthermore, if in two years neither the sale nor the transfer of management takes place, half of the debt will be automatically converted into DPL.