Exclusive: Brazil's Clealco in talks to renegotiate debt, eyes sale: sources

SAO PAULO (Reuters) - Clealco Açúcar e Alcool SA is in talks with banks to renegotiate terms of about 1.5 billion reais ($473 million) in loans, the latest Brazilian sugar firm restructuring operations amid a heavy debt burden, three people with knowledge of the situation said.

Shareholders of Clealco are considering resuming a process to look for a buyer, which could take place simultaneously with the loan renegotiation plan, said the first person, who is not allowed to discuss the plans publicly.

Clealco, which owns three mills in São Paulo state with annual combined cane crushing capacity of 10 million tonnes, hired advisory firm Pantalica Partners to advise on talks with banks including Rabobank NA [RABOVR.UL], Itaú Unibanco Holding SA and Banco Santander Brasil SA, the people said.

Clealco has yet to propose terms of the plan to creditors, they added. Partners in Clealco expect to fetch up to $500 million if they do sell the whole company, the first person added.

Clealco, based in Clementina, Brazil, declined to comment. Rabobank, Itaú, Santander and Pantalica also did not comment.

The decision comes two months after Clealco and Swiss commodities trader Glencore Plc suspended year-long talks over a potential sale. Reuters reported on Tuesday that Glencore is eyeing other Brazilian sugar installations, following the November acquisition of a mill from Unialco SA Álcool e Açúcar.

The third source said Clealco shareholders’ initial idea was to sell a minority stake in the firm to an investor to raise capital to cut the company’s debt load, but had no success.

Glencore declined to comment on what it termed “market rumor or speculation.”

Commodities firms and private equity funds are scouring for opportunities to buy mills in Brazil, the world’s No. 1 sugar producer, some of which remain mired in debt even as prices for sugar hover around a five-year high. Many mills have restructured their operations and others filed for creditor protection in the wake of a multi-year cycle of low prices that ended in 2015.

Editing by Guillermo Parra-Bernal and Leslie Adler