SAO PAULO, May 5 (Reuters) - One of Brazil's biggest sugar and ethanol groups São Martinho SA said on Monday it signed a deal to acquire control of sugar and ethanol mill Santa Cruz SA from Luiz Ometto Partcipações SA and other stake holders.
São Martinho said it will pay 315.8 million reais ($143 million) over a 10-year period for just more than 56 percent of Santa Cruz's capital, now held by Luiz Ometto Partcipações SA and other stake holders. This will bring São Martinho's total stake in Santa Cruz to more than 92 percent.
The deal, in which Santa Cruz will also lease as much as 20,122 hectares of cane land from Luiz Ometto Partcipações SA for 20 years, is the latest case of consolidation in Brazil's sugar and ethanol belt that has come under severe financial stress in the past years.
São Martinho said that Santa Cruz's debts totaled 658.6 million reais ($295 million) on March 31, 2014.
Santa Cruz has the capacity to crush 4.5 million tons of cane a year, producing 80 percent of its own annual cane needs.
Against a backdrop of losses for most cane mills much of the past two years, São Martinho is among a handful of mills that have managed to still show positive quarterly results.
This has given it an advantage over peers in acquiring distressed competitors at attractive prices. Six mills have filed for bankruptcy so far in 2014 and another 10 are likely not to open for the crushing season that started in April due to overwhelming debts. (Reporting by Reese Ewing; Editing by Cynthia Osterman)