June 25, 2008

Los Grobo, Pactual Capital buys troubled Brazilian soy company

Argentina's leading agricultural production company Grupo Los Grobo SA and Brazilian fund Pactual Capital Partners have purchased Brazilian seed and soy crushing company Selecta, local newspaper Valor Economico reported Tuesday (June 24, 2008).

The Goias-based company, Selecta, requested administrative restructuring in May during which its creditors would not be able to access their investments for a period of six months.

Grupo Los Grobo and Pactual signed an agreement Monday to take control of the seed company and start to restructure the business, the newspaper reported.

According to the terms of the agreement, Grupo Los Grobo would take over Selecta's US$400 million debt and inject another US$55 million into the company, Valor reported.

"This is enough to keep the company operating and to return to growth," the newspaper quoted Andre Sa, Grupo Los Grobo's vice president of finance, as saying.

Although Selecta had been expanding, the company faced difficulties in March in meeting margin calls and was unable to pay local farmers for physical soy.