RIO DE JANEIRO, BRAZIL – The joint venture between Royal Dutch Shell and Cosan, Raízen is seeking a valuation of R$70 (US$13.5) billion in its initial public offering (IPO), said sources with knowledge of the matter.
The valuation could range from R$60 billion to R$80 billion depending on demand, they added. Active in fuel distribution and sugar and ethanol production, Raízen decided to reduce the offer to about R$5 billion from the R$12 billion initially planned, sources said on condition of anonymity.
Raízen did not immediately respond to a request for comment.
The company plans to present a new prospectus to the CVM (Brazil’s Securities and Exchange Commission) later this week. In preliminary meetings with investors, a process known as ‘pilot fishing,’ the book was virtually fully covered, sources said.
BTG Pactual, Citi, Bank of America, Credit Suisse, JPMorgan, Morgan Stanley, Bradesco BBI, Santander Brasil, XP Investimentos, HSBC, Safra and Scotiabank are coordinating the IPO.
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No regular dividend — earnings reinvested for growth.
What Raízen does. Raízen S.A. operates as an integrated energy company in Brazil, Argentina, rest of Latin America, North America, Asia, Europe, and internationally. The company trades in and markets fossil fuels and franchises network of service stations under the Shell brand name. It also engages in the production, origination, marketing, and trading of ethanol…