July 7, 2020 / 3:44 PM / a month ago

UPDATE 1-Brazil's Cosan says reorganization may entail capitalization of all operating units

(Adds Credit Suisse’s comments)

SAO PAULO, July 7 (Reuters) - Brazilian energy company Cosan SA said on Tuesday its planned reorganization may involve fundraising by all the operating units it controls or co-controls, as it detailed a long-awaited move to simplify its corporate structure.

The viability of the potential capitalizations of each of the units, which operate in segments such as energy, sugar and logistics, would be weighed separately and depend on variables the company does not control, Cosan said in a securities filing.

Cosan’s reorganization was a long time coming, Credit Suisse said in a note to clients on Monday, and could potentially bring upside to shareholders of entities such as Cosan Limited and Cosan Logística.

After the restructuring, Cosan would still be controlled by owner Rubens Ometto through the family’s investment vehicle, Credit Suisse said.

Cosan said the restructuring should be completed in about 180 days and depends on several approvals, including that of all stake holders as well as Brazilian and U.S. capital market regulators.

On the potential IPOs of Cosan’s subsidiaries and co-controlled companies Raízen and Compass, Credit Suisse said assuming both entities would have a minimum 25% free float, “the capital raise would have to be very substantial.”

Credit Suisse said it values Raízen and Compass equities at respectively 51 billion reais ($9.63 billion) and 8.3 billion reais ($1.57 billion).

$1 = 5.2952 reais Reporting by Ana Mano Editing by Chizu Nomiyama and Bernadette Baum

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