Brazil Exits World’s Top Pulp Maker in $1.2 Billion Divestment
Brazil Unloads Stake in Pulp Giant as Downsizing Plan Advances
(Bloomberg) -- Brazil raked in 6.9 billion reais ($1.2 billion) with the sale of a stake in the world’s biggest wood-pulp producer, in its latest move to shrink the size of the government.
The investment arm of the country’s state development bank BNDES sold 150.2 million voting shares of Suzano SA at 46 reais apiece in an equity offering, according to the securities regulator, confirming an earlier report by Bloomberg. The price represented a 1% discount to Thursday’s close in a deal that mark’s the bank full exit from the firm.
Suzano rose as much as 2% to 47.45 reais in early trading Friday, bucking a decline in the Brazilian market, before paring gains.
JPMorgan was the lead underwriter after winning a price war and accepting a 0.28% fee that isn’t enough to cover costs, people familiar with the matter said at the time. Bank of America, Bradesco BBI, Itau BBA and XP Investimentos were also on the transaction.
A slimmed-down BNDES is part of President Jair Bolsonaro’s agenda to downsize the state. Earlier this year, the bank sold shares of miner Vale SA through a block trade and unloaded its voting stake in oil giant Petroleo Brasileiro SA in the biggest equity deal the nation has seen in a decade. It raised about 30 billion reais with the sales.
Shares of Suzano are up 17% this year as the company’s export revenue benefited from the Brazilian real’s slide at a time of lower costs. Some firms including Credit Suisse see pulp prices near an inflection point amid expectations of improving demand and higher maintenance stoppages.
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