ADV.L Regulatory News (ADV)

27 Mar 2007 07:03

Clean Energy Brazil PLC27 March 2007 27 March 2007 CLEAN ENERGY BRAZIL PLC ("CEB" or "the Company'') Completion of initial US$130m Investment Positive update on new opportunities The Board of Clean Energy Brazil, a leading specialist investment companyfocused on Brazil's sugar/ethanol industry, is pleased to announce thecompletion of its initial investment of approximately US$130m in Usaciga Acucar,Alcool e Energia Electrica S.A. ("Usaciga" or the "Investment"), and to providea positive update on new opportunities. The Directors are pleased to note that since the Company's successful IPO inDecember 2006 the gross initial proceeds of approximately $200 million(equivalent) have now been invested in Usaciga with the balance beingprovisionally allocated to the development of CEB's existing greenfieldportfolio. Usaciga • CEB's investment of approximately $130m for a 49% indirect stake in Usaciga has now been transacted as planned at an attractive multiple of US$79 per tonne of cane crushing capacity. • The Investment comprises interests in a producing sugar/ethanol mill, several greenfield developments, a bulk sugar terminal and an ethanol trading company. • Usaciga is now poised to increase significantly its cane crushing capacity over the next two to three years by utilising the CEB investment proceeds, active management expertise and debt refinancing with the aim of creating a mill company with a cane crushing capacity of more than 8 million tonnes per annum. • Prior to completion of the Investment - at no additional cost to CEB - Usaciga has: • acquired rights over Santa Cruz de Montecastelo, a new greenfield project with an anticipated crushing capacity of 2 million tonnes of cane per annum; and • agreed to increase its ownership of Rio Parana, a greenfield project in Eldorado city, Mato-Grosso do Sul state, from 33% to 100%, with an anticipated crushing capacity of 2.3 million tonnes of cane per annum. • CEB has now assumed an active role in the management of Usaciga, significantly enhancing operational efficiencies and assuming broad responsibility for hedging strategy. As a direct result, the operational management team is being strengthened with highly experienced personnel. Existing Greenfield Opportunities • CEB is progressing with the application for an environmental licence with respect to the Agua Limpa sugar cane greenfield distillery and expects to receive this licence in due course. • CEB continues to progress its evaluation of the Pantanal project, together with other opportunities described below. New Investment Pipeline • As a result of its established presence in Brazil, CEB has already gained access to a range of new investment opportunities, both producing mills and greenfield developments, which the Board is currently evaluating. The potential aggregate equity investment required to undertake these projects is in excess of US$500 million, although not all of these are expected to be taken forward to the next stage of evaluation. • By way of example, CEB's investment manager, Temple Capital Partners is in discussion on the following potential projects: • discussion at shareholder level with 2 groups of more than 5 million tonnes of sugar cane crushing capacity in which CEB may take a significant minority interest with satisfactory control by CEB; • a majority acquisition in a mill with 2 million tonnes of sugar cane crushing capacity with significant improvement potential and which has synergistic benefits for CEB's investment strategy; • joint venture greenfield development of 4 million tonnes of sugar cane crushing capacity mill with a leading sector operator; and • examination of 5 further greenfield opportunities, some of which are at an advanced stage, already planted with first or second year cane. Strategy • CEB's strategy is to build a significant profitable sugar and ethanol group with operating capacity to crush up to 30 million tonnes of sugar cane per annum. • More generally, the Board is encouraged by the growing global profile of the Brazilian ethanol industry and in particular its potential role in the development of an international ethanol market. The Board considers this will assist in the implementation of the Company's strategy. Financial Year End and Dividend Policy • To ensure that the Company's year end coincides with the Brazilian sugar cane crop year, the Board is to move the Company's accounting reference date to 30 April, with effect from 2007. The first accounting period will therefore be for the short period from 19 September 2006 to 30 April 2007. • As planned the Company expects, subject to any unforeseen circumstances and there being sufficient distributable reserves, to pay dividends to shareholders in June and December 2007 (amounting in total to 5p per share, as indicated in the Admission Document). In addition, to take account of the Company's revised year end date, the Board anticipates that on an ongoing basis, interim and final dividends will, if announced, be paid in March and September, respectively, with effect from 2008. Antonio Monteiro de Castro, Chairman of CEB, comments: "CEB is delighted to have completed the acquisition of Usaciga following aperiod in which we have been actively and successfully involved in managing theassets. CEB's investment strategy has been well received by the sugar cane sector inBrazil and we have been in a number of discussions, which are expected to resultin further investment opportunities for CEB." www.cleanenergybrazil.com Further enquiries: Clean Energy Brazil Tel: +44 (0)20 7839 4321Antonio Monteiro de Castro a.castro@cleanenergybrazil.com Temple Capital Partners Tel: +44 (0)20 7972 6643Peter Thompson p.thompson@cleanenergybrazil.com Numis Securities Limited Tel: +44 (0)20 7260 1000Andrew DawberTom FrostDavid Shapton Fishburn Hedges Tel: +44 (0)20 7839 4321James Benjamin Mob: +44 (0)7747 113 930Andy Berry Mob: +44 (0)7767 374 421Michelle James Mob: +44 (0)7958 451 446 ceb@fishburn-hedges.co.uk Smith & Williamson Corporate Finance Limited Tel: +44 (0)20 7131 4000Azhic BasirovDavid James Notes to editors CEB invests directly into existing and greenfield Brazilian sugar/ethanol assetsand actively manages and develops them. CEB is building an integrated group ofscale, working with its chosen partners to take full advantage of thesignificant growth potential and consolidation opportunities in Brazil's sugar/ethanol industry. CEB is not a new entrant; its experienced management team has personal, longstanding relationships within the sector in Brazil. CEB's investment managerTemple Capital Partners comprises: • Czarnikow Sugar - one of the world's largest market services providers for sugar and ethanol, employing some 130 professionals in 11 countries. • Agrop - one of Brazil's leading sugar cane processing consultancy and outsourcing services providers. Marcelo Junqueira is a landowner, farmer and shareholder in a Brazilian sugar mill company. • Numis Securities - a leading independent investment banking and broking group serving high quality London-quoted mid and small cap companies, with a leading profile in new energy and carbon emissions. Through this partnership CEB can call upon the direct services of more than 40professionals in Brazil and many more through Czarnikow's worldwide network.This constitutes one of the largest, most connected teams of professionalsworking in the sugar/ethanol sector in Brazil. The target assets comprise agricultural sugar cane plantations, industrialmilling facilities, sugar/ethanol production facilities, and associated exportlogistics infrastructure. Brazil is the world's largest sugar producer and exporter and is the lowest costproducer of raw sugar in the world. CEB invests in fully integrated businessesfrom cane to final customer. In December 2006, CEB successfully raised £100m and commenced trading on the AIMmarket in London. This information is provided by RNS The company news service from the London Stock Exchange