Brazil's VCP buys $1.16 billion stake in Aracruz

Jan 20, 2009. /Lesprom.com/. Brazilian pulp producer Votorantim Celulose e Papel (VCP) has said it would buy a 28.03% stake in Aracruz Celulose for 2.71 billion reais ($1.16 billion) as part of a plan to merge the two companies, informed Lesprom Network according to the PaperAge. The process was suspended in September after Aracruz, who is also a pulp producer in based in Brazil, reported losses with foreign exchange derivatives and its CFO resigned. VCP said it had signed an agreement with the families who control Aracruz and it would pay the amount in six instalments. The first payment of 500 million reais ($212 million) is slated for January 21, VCP added. VCP already holds 28% of Aracruz and controls the company with the Safra and Lorentzen families. In a separate report, Aracruz said banking creditors that account for more than 80% of the company's $2.13 billion debt from derivative transactions have shown "their express agreement to the minimal terms" put forward by Aracruz for the restructuring of the debt. According to the proposal, Aracruz will have up to nine years to pay its debt.