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Cargill enters dispute for Brazil soy crusher's assets

Published 06/16/2023, 11:25 AM
Updated 06/16/2023, 04:06 PM
© Reuters. FILE PHOTO: A Cargill logo is pictured on the Provimi Kliba and Protector animal nutrition factory in Lucens, Switzerland, September 22, 2016. REUTERS/Denis Balibouse/File Photo
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By Ana Mano

SAO PAULO (Reuters) -The Brazilian unit of U.S. grains merchant Cargill has asked a bankruptcy court to halt the auction of two plants owned by soy crusher Imcopa, scheduled for June 27, the latest twist of a running legal saga involving rival Bunge (NYSE:BG).

In court documents seen by Reuters, Cargill expressed interest in bidding for the assets but sought clarification about the liabilities attached to the plants.

Geraldo Gouveia Jr, Imcopa's attorney, told Reuters the bankruptcy judge has made no decision yet related to the request to suspend the court-supervised auction.

He declined to name other potential bidders but said the company welcomes Cargill's interest.

Cargill confirmed filing a petition with the bankruptcy court regarding the sale of Imcopa's assets. It said the company and other prospect bidders would benefit from additional time and more information on the conditions of the transaction.

"Cargill is always on the lookout for investment opportunities that add value to its business strategy," the firm said.

Cargill's move is another sign of likely consolidation in Brazil's soy crushing industry at a time of healthy margins and cheap soybean supplies after a bumper crop.

Imcopa's crushing plants are located in the southern state of Parana and are currently processing soy supplied by Bunge under an agreement with a brewing company leasing the assets for almost 10 years.

Bunge, which has long sought to acquire Imcopa's assets, signed a contract to buy the Araucaria and Cambe plants in May 2020. However, the deal came undone in a still-unresolved legal battle involving the brewer and foreign creditors of Imcopa.

Bunge did not immediately comment.

© Reuters. FILE PHOTO: A Cargill logo is pictured on the Provimi Kliba and Protector animal nutrition factory in Lucens, Switzerland, September 22, 2016. REUTERS/Denis Balibouse/File Photo

Citing bankruptcy court filings, Imcopa's Gouveia Jr said Bunge has publicly reiterated interest in buying Imcopa's plants.

The assets remain attractive because they produce high value soy byproducts for export and the domestic market. One plant is also close to Paranagua, a key port in southern Brazil.

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