Monday, 26 January 2009

Folha Says Votorantim Group Rushing to Raise Cash After Derivatives Crisis

Folha de S. Paulo, the Brazilian newspaper, reported Jan. 21 that Grupo Votorantim, the most-diversified private industrial group in Brazil, has raised 4.8 billion reais in cash from asset sales and may fetch another 2.4 billion reais through the divestiture of units including its technology arm Tivit and CPFL, the energy company in which it holds a 14 percent stake. The newspaper unfortunately gives no nut graph, or a reason why the company is doing this. We assume that this has to do basically with the serious losses the group's cellulose unit (Votorantim Celulose) posted for bad bets on currency derivatives contracts. The group, controlled by the Ermirio de Moraes family, sold a couple of weeks ago almost half of its stake in Banco Votorantim for 4.2 billion reais to state-controlled Banco do Brasil.

No comments:

Post a Comment