Specialist sugar and ethanol investment company, Clean Energy Brazil, lost more than half of its value after it admitted it needed to secure additional funds and substantially wrote down the value of one of its key investments.
Clean Energy Brazil was forced to write down the value of its investment in Usaciga Group to US$50 million, where delays to the opening of the 9,000 hectare Rio Paran sugar plantation and mill, meant the Brazilian company would now need to raise additional capital to complete the project. Until financing is secured, work on the project has been suspended. Clean Energy Brazil invested US$127 million in the Usaciga Group.
Disappointing news also emanated from CEB's investment in Unialco MS, where delays to securing finance for the 2.5 million tonnes per annum Dourados facility now meant the operation would now likely commence one year behind schedule, in the 2010/2011 crop year.
CEB also announced that it had terminated its advisory agreement with Temple Capital Partners, and as a result, has issued 11.8 million shares in consideration.
"The immediate aim of the Company is to resolve its current challenges which have coincided with difficult conditions in financial markets and the Brazilian sugar sector," the company stated. "We are facing and resolving current challenges and have engaged Merrill Lynch together with Numis as advisers on a capital raising to support our business plan."