Brazil's VCP Buys $1.16 Billion Stake in Aracruz
Jan. 20, 2009 - Brazilian pulp producer Votorantim Celulose e Papel (VCP) today said it would buy a 28.03 percent stake in Aracruz Celulose for 2.71 billion reais ($1.16 billion) as part of a plan to merge the two companies.
The process was suspended in September after Aracruz, who is also a pulp producer in based in Brazil, reported losses with foreign exchange derivatives and its chief financial officer resigned.
VCP said it had signed an agreement with the families who control Aracruz and it would pay the amount in six instalments.
The first payment of 500 million reais is slated for Wednesday, Jan. 21, VCP added.
VCP already holds 28 percent of Aracruz and controls the company with the Safra and Lorentzen families.
In a separate report, Aracruz said banking creditors that account for more than 80 percent of the company's $2.13 billion debt from derivative transactions have shown "their express agreement to the minimal terms" put forward by Aracruz for the restructuring of the debt.
According to the proposal, Aracruz will have up to nine years to pay its debt.