Mubadala buys stake in Lone Star and takes over Atvos
After months of fights and accusations, Mubadala Capital managed to fold the American fund Lone Star and bought control of the sugar and alcohol company Atvos, the former Odebrecht Agroindustrial. The agreement was signed earlier this week and executives Ricardo K. and Giovanne Forace, partners at RK Partners, also started to hold a stake in the company through their own vehicle, sources involved in the negotiation told the Brazil Journal .
The value of the deal was not disclosed, but Lone Star held $5 million in equity and a face value of $370 million in debt. In the coming weeks, Mubadala, linked to the sovereign wealth fund of the United Arab Emirates, should replace the company’s CEO, Gustavo Alvares, linked to Lone Star. The replacement has not yet been chosen. “But there are a lot of talented people at the company who should follow,” said a source.
The company is also going to make a capitalization of R$ 500 million in order to increase its production. The goal is to expand sugarcane crushing capacity from 23 million to 36 million tons in four years. The company’s management will change hands two years after Lone Star takes control of the company.
In 2020, the sugar and alcohol company entered into judicial recovery, with debts of R$ 14 billion – an amount that dropped to R$ 6 billion after the approval of the plan. The Lone Star fund came to control Atvos when it bought a stake in the Natixis bank that had been given as a guarantee to Odebrecht creditors after the Lava Jato scandal broke.
Since then, the company has returned to generating cash. In fiscal year 2021/2022, adjusted EBTIDA rose 83% to R$2.2 billion. In December of last year, however, Mubadala closed an agreement with the company’s creditor banks to take control of Atvos. Lone Star did not participate in the discussions and tried to resolve the case in court Did not work.
“These legal fights can be resolved in love or pain. As Lone Star was taken aback, the reaction was to be litigious, but they decided to negotiate after seeing the legal merits,” said a source. With the disputes with Lone Star resolved, Mubadala will have 31.5% of Atvos’ capital. The other 68.5% are divided between the creditor banks, Novonor and the RK executives’ own vehicle, which will manage this slice through the Agroenergia FIP Multiestratégia fund. BR Partners advised Lone Star.