Chinese commodities trader COFCO taking part in Brazil auction for sugar mill

Chinese commodities trader COFCO has asked to participate in an auction in Brazil where a sugar mill owned by India’s Shree Renuka Sugars Ltd will be sold as part of an in-court debt restructuring, according to court documents seen by Reuters on Tuesday.

COFCO already owns four sugar and ethanol plants in Brazil capable of processing a combined 15 million tonnes of cane per year. The company looked at other potential targets last year, but said prices were too high.

Renuka, which is under bankruptcy protection, will sell its Revati mill in the municipality of Brejo Alegre in Sao Paulo state. The plant, which is near COFCO’s Sao Paulo operations, has capacity to process 4 million tonnes of cane per year. The auction is scheduled for September 4.

If successful, it would be the third sale of sugar and ethanol plants in Brazil through judicial auctions in less than a year, as players with stronger capital structure snap up the assets of heavily indebted rivals.