Bloomberg News

Rothschild-Backed Agrifirma Mulls Brazil IPO for Investments

September 06, 2011

(Updates with Brazil IPOs in 10th paragraph.)

Sept. 6 (Bloomberg) -- Agrifirma Brasil Agropecuaria Ltda., a Brazilian farmland company backed by financier Jacob Rothschild, may sell shares and debt to pay for “unique” investment opportunities in Latin America’s largest economy.

The company may sell stock as early as next year, said Chief Executive Officer Julio Bestani, who declined to comment on how much the company may raise. The company isn’t likely to seek to raise capital in an initial public offering this year given the economic situation in Europe and the U.S., he said.

“We plan to sell shares on the BM&FBovespa as soon as possible” to fund future investments, Bestani said yesterday in a telephone interview from Sao Paulo. The company will “for sure consider future debt sales,” he said, without elaborating.

Agrifirma, based in Sao Paulo, buys scrubland and transforms it into farmland to plant soybean, corn and cotton. It owns or leases 70,000 hectares (173,000 acres) of land in Brazil, an area about the size of the city of Chicago.

The company is controlled by a private equity fund managed by Sao Paulo-based BRZ Investimentos, which on Aug. 31 injected $82 million to gain an undisclosed stake. Genagro Ltd., whose shareholders include Rothschild, has a minority stake.

More Acquisitions

Agrifirma is looking for more land to acquire in Brazil.

“Brazil has unique conditions in terms of quality of the land, availability of agricultural land and water resources,” said Bestani, a former chief financial officer for Adecoagro SA.

Adecoagro, backed by billionaire investor George Soros, rose $314 million in an initial public offering in the U.S. last January after pricing it at the bottom of the range. The Luxembourg-based company plans to use proceeds to build a sugar and ethanol processing plant in Brazil and to buy farmland.

Brazil’s benchmark Bovespa index entered a bear market on July 27 after declining 20 percent from its bull-market peak in November. At least nine companies have shelved IPOs in Brazil this year, data compiled by Bloomberg and the securities regulator show. Los Grobo SA, Argentina’s second-biggest soybean producer, suspended its Brazil IPO plans in July.

Copersucar SA, the Brazilian sugar-trading cooperative that accounts for 10 percent of global sugar exports, canceled in August what could have been Brazil’s largest IPO in two years. BrasilAgro - Cia. Brasileira de Propriedades Agricolas, a Brazilian farmland company, canceled plans to sell additional shares in May.

Main Shareholder

Agrifirma’s main shareholder, the Brasil Agronegocio FIP private equity fund, has Brazil’s development bank, known as BNDES, and pension funds among investors, said a spokeswoman for BRZ Investimentos, who can’t be named because of company policy.

Brazil, the world’s second-largest producer of soybeans after the U.S., harvested 75.3 million tons of the oilseed this year, up from 68.7 million tons a year ago. The country, the world’s third-biggest corn producer after the U.S. and China, produced 56.3 million tons of corn, up from 56 million tons.

Soybean futures for November delivery dropped 31.75 cents, or 2.2 percent, to $14.14 a bushel at 11:26 a.m. in Chicago. Before today, the price gained 43 percent in the past year.

--Editor: Dale Crofts, Jessica Brice

To contact the reporter on this story: Lucia Kassai in Sao Paulo at

To contact the editor responsible for this story: Dale Crofts at

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