Bunge files for IPO of Brazilian sugar milling business

By Erin Voegele | May 16, 2018

On May 15, Bunge Ltd. announced it filed a registration request with the Brazilian Securities Commission for a potential initial public offering (IPO) of its sugar milling business in Brazil, which produces both sugar and ethanol.

The potential IPO applies to Bunge Açúcar & Bionergia, the company’s Brazlian sugar milling business. Bunge Açúcar & Bionergia owns and operates eight mills located across the southeast, north and midwest regions of Brazil. The mills have a combined 22 million metric tons of annual crushing capacity and are able to produce a mix of ethanol and sugar. Bunge Açúcar & Bionergia also generates renewable electricity through cogeneration facilities and is able to self-sufficiently power its eight mills and sell surplus electricity to the Brazilian power grid.

According to Bunge, it has prepared Bunge Açúcar & Bionergia to operate as a stand-alone company and recently obtained debt financing for the business. The filing announced May 15 further progresses Bunge’s previously stated intentions to focus on its Agribusiness and Food & Ingredients businesses and enables the company to move forward with an IPO, subject to market conditions and valuation. According to Bunge, following the execution of the IPO, Bunge would be the majority shareholder, enabling it to participate in future value creation driven by the stand-alone company’s growth and cyclical improvement in global sugar market conditions.