Exclusive: Brazil soy trader offers assets to CHS, Bunge in bankruptcy case - sources

SAO PAULO (Reuters) - Brazilian soy trader Seara Industria has offered logistics assets to creditors including U.S. trader Bunge Ltd BG.N and U.S. agricultural cooperative CHS Inc CHSCP.O in a bid to resolve bankruptcy proceedings, according to two people involved in the matter.

Seara Industria & Comercio de Produtos Agropecuarios Ltda, one of Brazil’s 10 biggest commodity trading firms, filed for bankruptcy protection in April to restructure 2.1 billion reais ($667 million) in debt.

In July, an appeals judge granted a motion to halt the case while court-appointed forensic accountants investigated creditors’ allegations that the company had falsified financial statements, according to six people and court documents seen by Reuters.

In a bid to resolve the bankruptcy process, Seara Industria proposed an out-of-court settlement with creditors last week, according to two of the people, who requested anonymity due to the sensitivity of talks.

The proposal under discussion involves giving its grains port and transshipment terminals to the agricultural traders, the people said.

Seara Industria told Reuters that the accusations of fraud were false and that it had appealed the decision to suspend its bankruptcy protection proceedings. It declined to comment on a possible out-of-court deal.

CHS, the largest creditor of Seara, had at one point engaged in talks to buy the company, said two people with knowledge of talks. A press representative for CHS confirmed that it is a creditor of Seara Industria but said it “does not comment on active investigations.”

Seara Industria is also discussing an investment from China's Shanghai Pengxin Group Co to cover payments to financial creditors such as Credit Suisse, Rabobank and Citigroup C.N, one of the people said. Pengxin did not respond to a request for comment. Seara declined to comment.

Last year, Pengxin bought two grain traders in Brazil as part of a push by Chinese companies to secure long-term food supplies.

Seara Industria owes $218 million to CHS, the largest U.S. agricultural cooperative, the court documents showed.

Dutch lender Rabobank Groep NV [RABOVR.UL] is owed about $82 million; Switzerland's Credit Suisse Group AG CSGN.S $15 million; and commodities trader Bunge's Brazilian subsidiary Bunge Alimentos SA is owed $18 million, according to the documents.

Credit Suisse, Bunge and Rabobank declined to comment.

The documents from Brazil’s Fourth Federal Regional Court also showed that financial data that Seara Industria presented to Credit Suisse before the bankruptcy protection filing differed from the company’s 2016 earnings statement.

Seara Industria told Reuters that the documents sent to Credit Suisse were only preliminary.

A judge in the case found “strong evidence that the data do not reflect the company’s real situation,” according to the court ruling in July that suspended bankruptcy protection proceedings.

Documents attached to the request to suspend bankruptcy proceedings also showed that a unit of U.S. investment firm Corrum Capital Management LLC has alleged that soy commercially pledged by Seara Industria “disappeared from warehouses.”

Asked about this allegation, a lawyer for Seara, Assione Santos, said some of the company’s clients did not receive the grain they had the right to by contract due to a fall in grains production in Brazil in 2016 after a drought.

Corrum, which is also a creditor of Seara, declined to comment.

State-owned Banco do Brasil SA BBAS3.SA alleged in a court complaint that the Zanin family, owner of Seara Industria, had defrauded creditors and it asked for liquidation of the company.

According to court documents, the company transferred two apartments that it had owned to the family and wired 40 million reais from company accounts before filing for bankruptcy protection.

Seara’s lawyer Santos told Reuters that the transfer of the apartments was not illegal. He said the 40 million reais was a payment to the owner of Seara, Santo Zanin Neto, to acquire his personal stakes in the logistics terminals and to pay for shipments of corn that he sold to the company.

The proposal for an out-of-court agreement would require Seara Industria to relinquish most of its assets, including a soy processing plant, warehouses, three logistics terminals and a port terminal in Paranaguá, two sources said.

The terminals are considered valuable because they allow for grain shipments by rail from Mato Grosso to the southern port of Paranaguá. The terminals have long-term contracts with Brazilian logistics company Rumo RAIL3.SA.

($1 = 3.15 Brazilian reais)

Reporting by Tatiana Bautzer and Marcelo Teixeira; Editing by Guillermo Parra-Bernal, Brad Haynes, and Daniel Flynn