India's Shree Renuka seeks to protect its Brazil mills from creditors
SAO PAULO, Sept 29 (Reuters) - Renuka do Brasil SA and Renuka Vale do Ivai SA, Brazilian sugar and ethanol makers controlled by Indian sugar group Shree Renuka Sugars, have filed for court protection from creditors, according to documents made public by a Sao Paulo court on Monday.
The Shree Renuka subsidiaries operate four mills in Brazil in the states of Sao Paulo and Parana. According to local media reports, they have a total debt load of 3 billion reais ($735 million) after several years of losses amid low sugar and ethanol prices.
Shree Renuka entered the Brazilian sugar sector in 2009, when it bought controlling stakes in the four mills from two local companies.
At the time of the deal, the Indian company had assumed debt from former owners and the situation grew unsustainable after years of poor market conditions.
Some 70 sugar and ethanol makers in Brazil have closed doors or asked for court protection from creditors in the last four years, according to cane industry group Unica.
Last month, top sugar and ethanol equipment maker Dedini also filled for bankruptcy protection.
Others are trying to sell part of their business to avoid bankruptcy, such as the Ruette Group, which is in talks with Cargill's fund Black River.
According to Brazilian legislation, if Renuka's request is approved, it will have 180 days to prepare a plan outlining how it intends to pay creditors.
During that period it would be protected from legal actions such as recent ones trying to seize sugar and other assets from the company. Continuación...