ADV.L Regulatory News (ADV)

20 Nov 2008 11:26



20 November 2008

CLEAN ENERGY BRAZIL PLC

("CEB" or the "Company")

Update on USACIGA

Clean Energy Brazil plc, an investment company focused on Brazil's sugar cane/ethanol industry, announces an investment update for its Usaciga asset, ahead of the publication of its midyear financial results. 

Usaciga continues to receive the assistance of Alvarez & Marsal in relation to the management of its debt and securing new sources of funds. Debt levels in US$ have remained relatively stable over the last three months at approximately US$115 million (of which approximately US$60 million is short term and US$55 million is long term), although in local currency during the same period, the 35% strengthening of the dollar has greatly contributed to the 21% increase of the total debt to approximately R$236million. As previously announced, the capital expenditure incurred by Usaciga in the Rio Parana greenfield site has resulted in a significant working capital shortfall and suppliers are now owed approximately R$36 million (US$17 million). Without debt restructuring and/or further funding becoming available in the short term, Usaciga will not be able to meet its current obligations to creditors.

During the current crop season, from 1 May until the end of October, the operation crushed a total of 1.4 million tonnes of cane. This resulted in an output of 105,000 tonnes of sugar and 46,000 m3 of ethanol. Unaudited sales during the period were approximately US$45.7 million. Non cash foreign exchange losses of US$15.5 million have contributed to a net loss on an unaudited basis of approximately US$21.4 million (this contrasts with 2007/08 when Usaciga achieved a profit through its hedging policy).

Usaciga also continues to pursue funding for the development of its Rio Parana greenfield.

Currently, CEB's cash balance stands at approximately US$28 million (of which US$6.7million is held in escrow and may in due course be payable to Usaciga pursuant to the December 2006 investment agreement between CEB, Usaciga and the Barea family).

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