(Corrects currency in headline to Brazilian real, not US dollars)
SAO PAULO (Reuters) -Brazilian conglomerate Cosan’s plans to raise up to 10 billion reais ($1.9 billion) through public offerings will go only to alleviating the company’s debt, a top executive said on Monday, adding none of the funds would go to helping its embattled joint venture with oil giant Shell.
“The capital will be used exclusively to de-leverage Cosan,” Cosan CFO Rodrigo Araujo said during an investor call, following the announcement of the capital hike late on Sunday.
Raizen, the joint venture with Shell, produces sugar and ethanol as is one of the largest energy companies based in Latin America’s largest economy. Low sugarcane yields have however hit its bottom line, debt and stock performance.
Cosan’s capital increase plan is expecting a 4.5 billion-real investment from BTG Pactual Holding — whose partners include billionaire Andre Esteves — and an additional 2 billion reais from Perfin Infra Fund.
Cosan’s founder, Rubens Ometto, is set to contribute with 750 million reais through his family office.
A follow-up offering of up to 2.75 billion reais is also planned.
The financial restructuring also sets the stage for leadership succession at Cosan, the company said in its presentation to the market on Monday.
Ometto, or a successor appointed by him, is expected to remain chairman for the next six years.
Cosan reported a net debt of 17.5 billion reais ($3.3 billion) at the end of June, stable from the end of the first quarter.
($1 = 5.3378 reais)
(Reporting by Luciana Magalhaes; Writing by Fernando Cardoso; Editing by Sarah Morland)
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