Brazil’s Brenco projects $3.2 billion from IPO this year or in 2009
April 29, 2008
In Brazil, Brenco said that it expects to raise $3.2 billion from an IPO no later than 2009, and will use the proceeds to construct 10 ethanol plants by 2015 with a planned capacity of 1 billion gallons per year. The company has invested more than $1 billion to date in the construction of four plants in Mato Grosso, Mato Grosso do Sul and Goias, from proceeds of private placements that have snagged investors such as Bill and Hillary Clinton, Vinod Khosla, Ron Burkle, and Goldman Sachs. The company will construct a 650-mile pipeline from Mato Grosso to Santos in an additional $1 billion investment.
A Brenco plant connected to an investment group including former US President Bill Clinton has been described as providing “degrading” conditions for its field workers. Brazil Renewable Energy, or Brenco, said that it was addressing the problems. President Clinton and his wife Sen. Hillary Rodham Clinton have an investment listed at between $15,000 and $50,000 in the plant, through the Yucaipa Company controlled by Ron Burkle. Yucaipa owns 2.8 percent of Brenco.
Burkle has raised more than $100,000 for the Clinton presidential campaign, and Senator Clinton has sponsored legislation to provide massive government investments in ethanol. Yucaipa has, in turn, invested in numerous ethanol companies, including Cilion.
Former US President Bill Clinton’s Clinton Global Initiative, is highly active in international biofuel policy, and his ties to Ron Burkle’s interested have been widely reported. However, the Clintons reduced ties with Burkle as the campaign got underway. President Clinton’s Vice-President, Al Gore, recently won the Nobel Peace Prize for his activities in behalf of climate change.
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[...] Philippe Reichstul, CEO of Brenco, said yesterday his company will seek an IPO worth $3.2 billion by the end of 2008 or 2009. The IPO proceeds will help the Brazilian ethanol company expand its refining base to 10 ethanol plants by 2015, with an annual production capacity of around 1 billion gallons. Brenco is at work now constructing four ethanol refineries and a 650-mile pipeline at a combined cost of roughly $2 billion, which makes it one of Brazil’s leading ethanol companies. That Reichstul was once the CEO of Petrobras probably doesn’t hurt the company’s chances either. [...]