Mercuria moves closer to buying troubled Raizen's Argentine assets for over $1 billion, sources say

Mercuria Advances Acquisition of Raizen's Argentine Assets for $1 Billion

Mercuria's Bid for Raizen's Assets

By Luciana Magalhaes and Oliver Griffin

Details of the Acquisition

Feb 10 - Swiss-founded energy and commodity company Mercuria Energy Group has advanced in its bid to acquire a refinery and hundreds of gas stations in Argentina from troubled Brazilian sugar-and-ethanol producer Raizen, according to two people familiar with the matter.

Raizen's Financial Struggles

One source said that the deal could be closed soon, though there remains a risk it may not be completed. A second source said that the signing could still be a few weeks away, adding that the transaction is likely to surpass $1 billion, though no binding agreement has yet been signed.

Market Reactions and Future Outlook

One of the two people said that global energy and commodities conglomerate Vitol Group had also previously pursued acquiring the assets of Raizen in Argentina, but talks with Mercuria moved forward. 

Mercuria, Vitol and Raizen did not immediately respond to requests for comment. 

Bloomberg was first to report that Mercuria was nearing a deal to buy Raizen assets in Argentina. 

Raizen, a joint venture between Brazilian conglomerate Cosan and London-listed oil company Shell, has posted a series of heavy quarterly net losses and accumulated high levels of debt.

The mounting financial pressure has triggered a selloff in its bonds and prompted two major credit rating agencies to downgrade the company earlier this week.

Fitch slashed Raizen's credit score first to 'B' and later the same day to 'CCC'. S&P Global Ratings downgraded Raizen to 'CCC+'.

Late Monday, Raizen confirmed that it has appointed law firms Pinheiro Neto and Cleary Gottlieb as legal advisors and Rothschild as its financial advisor.

(Reporting by Luciana Magalhaes and Oliver Griffin)