(Updates with Brazilian IPOs this year in fourth paragraph.)
July 19 (Bloomberg) -- Copersucar SA, the millers cooperative that accounts for 10 percent of global sugar exports, suspended plans to sell shares in an initial public offering in Brazil, two people familiar with the transaction said.
Copersucar and its 26 shareholders were planning to raise as much as 2.7 billion reais ($1.7 billion) in what could’ve been Brazil’s largest initial public offering in two years. The company decided to pull the deal because of market conditions, one of the people said, asking not to be named because they’re not allowed to speak publicly about the transaction.
The initial plan was to sell as many as 145.9 million shares, including possible supplementary offerings, for 14.50 reais to 18.50 reais each, according to a June 30 preliminary prospectus.
Seven out of the 10 companies that held IPOs in Brazil this year sold shares at the bottom of their price ranges or below, including oil and gas producer QGEP Participacoes SA and Qualicorp SA, a health-insurance broker controlled by Washington-based Carlyle Group. At least five companies have canceled IPO plans in Sao Paulo this year before Copersucar.
The company planned to use proceeds from the share sale to build an ethanol pipeline in Brazil and almost double its sugar export capacity at the Port of Santos, Brazil’s largest for the sweetener, to 10 million metric tons. The cooperative’s 48 mills have agreed to supply all the sugar and ethanol they produce in the next decade for Copersucar to trade.
Copersucar’s mills can process 115 million tons of sugar- cane and had reported net sales of 8.3 billion reais in the fiscal year that ended March 31.
Companies in Brazil raised 6.14 billion reais in initial public offerings this year, or 10 percent less than the same period last year, Bloomberg data show.
Banco Itau BBA SA was coordinating Copersucar’s share sale with Bank of America Merrill Lynch Banco Multiplo SA, Banco de Investimentos Credit Suisse (Brasil) SA and Goldman Sachs do Brasil Banco Multiplo SA.
--With assistance from Alexander Cuadros and Helder Marinho in Sao Paulo. Editors: Helder Marinho, Adriana Arai
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