December 7, 2019 / 2:46 AM / 2 months ago

Brazil judge moves Imcopa plant sale as Bunge seeks more info

SAO PAULO (Reuters) - A Brazilian bankruptcy judge has pushed back the sale of two soy crushing plants after U.S-based grain trader Bunge Ltd alleged the seller provided insufficient information about the assets, according to court filings seen by Reuters on Friday.

The auction of the two plants by privately owned Imcopa group, rescheduled to Feb. 17 from Dec. 4, is part of the seller’s plan to emerge from bankruptcy.

Imcopa and a court-appointed judicial administrator agreed to cancel this week’s auction of the two strategic plants in Paraná state, court documents showed.

Bunge owns most of Brazil’s oilseeds crushing and refining facilities, with 12, followed by Cargill [CARGIL.UL] with eight, according to industry group Abiove data from 2018.

One of Imcopa’s plants is 100 km (60 miles) from a key port and produces soy protein concentrate used to make livestock feed.

Bunge said there are synergies for one buyer to run both units.

“Bunge not only intends to acquire the two industrial plants ... (it also) intends to hire a significant number of the current employees allocated to Araucária and Cambé ...,” according a filing Bunge made to the court dated Nov 26.

Paraná accounts for 19% of Brazil’s oilseeds processing capacity.

Bunge alleged that missing and “outdated” information in Imcopa’s data room makes it hard to analyze the risks of the potential investment.

It also claimed “inconsistencies” between the reorganization plan and bidding rules.

According to Bunge’s interpretation of Imcopa’s reorganization plan, both plants should be divested under the same “UPI” structure, which can be sold free of any liabilities.

Partially agreeing with Bunge’s arguments, Judge Mariana Gusso ordered Imcopa to update the data room, a Dec. 3 ruling showed. However, the decision stated that Imcopa’s reorganization plan allows the creation “of up to two UPI” structures.

Bunge declined to comment.

The minimum asking price for each of the plants is 25 million reais.

The combined debt attached to the two plants, which any buyer will have to assume, is 1.043 billion reais ($248 million) as of December 2018, according to public records.

Imcopa, which makes soyoil and soy protein concentrate, is one of the largest non-genetically modified soy crushers in Brazil. It declined to comment.

Two other potential contenders are CJ Selecta, owned by South Korea’s CJ Cheiljedang, and the local unit of Russia’s Sodrugestvo.

Neither returned a request for comment.

In August, Imcopa unilaterally terminated a leasing contract with brewer Grupo Petrópolis for the two crushing plants as it was preparing to sell the assets, alleging a breach of contract.

Reporting by Ana Mano; Editing by Chizu Nomiyama, Richard Chang, Jonathan Oatis and Sonya Hepinstall

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