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Shree Renuka Sugars share price rises on Brazilian deal news

Mumbai, Feb 22 (IANS) The scrip of sugar refining major Shree Renuka Sugars Ltd (SRSL) rose more than 3.94 percent at the Bombay Stock Exchange during morning trade Monday, after the company said it was acquiring majority stake in a large Brazilian sugar and ethanol firm.

The SRSL stock rose more than 3.94 percent to Rs.187 during morning trade, before settling to Rs.184.10, an increase of 2.33 percent from its previous close at Rs.179.90.

"We have entered into definitive agreements with Grupo Equipav for an investment of $329 million (Rs.1,530 crore) leading to a majority, controlling equity stake in Equipav S.A. ACUCAR e ALCOOL (Equipav), one of the largest sugar or ethanol Companies in Brazil," Shree Renuka Sugars said in a statement.

After the deal, Shree Renuka Sugars stake in the Equipav will be 50.79 percent, while the balance stake would be held by the founding Equipav group.

The money from the stake sale will be used by the Brazilian entity to expand its generation capacity in the sugar and ethanol based power segments.

Equipav's net debt of $882 million (Rs.3,821 crore) will also be paid in part using the infused capital.

Brazil is the world's largest producer and exporter of sugar, while India is the largest consumer.

"This acquisition will significantly multiply SRSL's presence in the Centre-South region of Brazil and enhance its competitiveness and size in the global sugar business," said the statement.

The Indian sugar major had in November 2009 fully acquired Vale Do Ivai, a Brazilian sugar and ethanol production company.

(News published under the licence from Indo Asian News Service)

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