Brazil conglomerate Cosan SA is reassessing plans to sell assets after it cut debt by half in the past year and as market conditions improved on bets that opposition candidate Flávio Bolsonaro will be elected president, according to people familiar with the matter. Brazilian assets rallied this week following a first round in a presidential race that showed Bolsonaro surprisingly ahead of incumbent President Luiz Inácio Lula da Silva. Bolsonaro is seen by investors as more prone to tackle fiscal concerns that would allow interest rates to decline.
Cosan, whose businesses span sugar, lubricants, fuel distribution, rail transportation and natural gas, has been seeking to improve leverage amid high interest rates. Over the past year, it strengthened its balance sheet by selling farmland and taking its gas unit, Compass Gas e Energia SA, public. With market players pricing in a Bolsonaro victory in the Oct. 25 runoff, the company sees more room to renegotiate asset sales, one person said.
One deal under review is the potential sale of part of its stake in rail operator Rumo SA. Other sales being reviewed include an additional share offering by Compass and a stake in lubricant maker Moove. Cosan shares jumped 24% this week, the third-biggest gain on the Ibovespa. The asset-sales reassessment also reflects an improvement in Cosan’s financial position after a 10 billion real ($2 billion) capital injection backed by BTG Pactual Holding and Perfin Infra Fund.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing