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Raizen to Reportedly Sell Downstream Argentinian Assets to Mercuria for $1.42 Billion

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Brazilian sugar and ethanol producer Raizen, through its subsidiary Raizen Energia, will sell its downstream assets in Argentina to Mercuria Energy Group for $1.42 billion, according to media reports.

The deal involves a cash payment and assumption of debt by the buyer, according to Reuters, citing a securities filing.

The company is a joint venture between Shell (SHEL) and Brazil's Cosan and it has been seeking to reduce large debts amassed through capital spending and exacerbated by unfavorable weather and wildfires that destroyed some of the sugar cane crop, Reuters reported.

Brazilian newspaper Valor Economico said the sale process has been in the works for about a year and a half and had attracted interest from commodities companies including Trafigura, Vitol and Saudi Aramco.

Argentine businessman Jose Luiz Manzano, a partner at Mercuria in other ventures, is part of the buying consortium Valor Economico said, based on information from sources.

Reuters reported that the company's creditors have been examining Raizen's final proposal for restructuring out of court, that would cover 65 billion reais ($12.83 billion) of debt.

has reached out to Raizen for a comment.

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